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United States Government Accountability Office: GAO:
Office of the General Counsel:
March 2013:
Principles of Federal Appropriations Law:
Annual Update of the Third Edition:
GAO-13-273SP:
Preface:
We are pleased to present the annual update of the third edition of
Principles of Federal Appropriations Law. Our objective in this
publication is to present a cumulative supplement to the published
third edition text that includes all relevant decisions from January 1
to December 31, 2012.
The annual update is posted electronically on GAO’s Web site
[hyperlink, http://www.gao.gov]. These annual updates are not issued
in hard copy and should be used as electronic supplements. Users
should retain hard copies of the third edition volumes and refer to
the cumulative updates for newer material. The page numbers identified
in the annual update as containing new material are the page numbers
in the hard copy of the third edition and the new, updated information
appears as bolded text.
[End of section]
Volume 1:
Forward:
Chapter 1 – Introduction:
Chapter 2 – The Legal Framework:
Chapter 3 – Agency Regulations and Administrative Discretion:
Chapter 4 – Availability of Appropriations: Purpose:
Chapter 5 – Availability of Appropriations: Time:
Volume 2:
Chapter 6 – Availability of Appropriations: Amount:
Chapter 7 – Obligation of Appropriations:
Chapter 8 – Continuing Resolutions:
Chapter 9 – Liability and Relief of Accountable Officers:
Chapter 10 – Federal Assistance: Grants and Cooperative Agreements:
Chapter 11 – Federal Assistance: Guaranteed and Insured Loans:
Volume 3:
Chapter 12 – Acquisition of Goods and Services:
Chapter 13 – Real Property:
Chapter 14 – Claims against and by the Government:
Chapter 15 – Miscellaneous Topics:
[End of section]
Forward:
Page i – Insert the following as footnote number 1 at the end of the
first paragraph (after “GAO Legal Products.” 1):
[1] Section 8 of the GAO Human Capital Reform Act of 2004, Pub. L. No.
108-271, 118 Stat. 811, 814 (July 7, 2004), 31 U.S.C. § 702 note,
changed GAO’s name to the “Government Accountability Office.” This
change was made to better reflect GAO’s current mission. See S. Rep.
No. 108-216, at 8 (2003); H.R. Rep. No. 108-380, at 12
(2003). Therefore, any reference in this volume to the “General
Accounting Office” should be read to mean “Government Accountability
Office.” The acronym “GAO” as used in the text now refers to the
Government Accountability Office.
[End of section]
Chapter 1: Introduction:
B. The Congressional “Power of the Purse:”
Page 1-4 – Replace footnote number 6 with the following:
[6] Numerous similar statements exist. See, e.g., Knote v. United
States, 95 U.S. 149, 154 (1877); Marathon Oil Co. v. United States,
374 F.3d 1123, 1133–34 (Fed. Cir. 2004), cert. denied, 544 U.S. 1031
(2005); Gowland v. Aetna, 143 F.3d 951, 955 (5th Cir. 1998); Hart’s
Case, 16 Ct. Cl. 459, 484 (1880), aff’d, Hart v. United States, 118
U.S. 62 (1886); Jamal v. Travelers Lloyds of Texas Insurance Co., 131
F. Supp. 2d 910, 919 (S.D. Tex. 2001); Doe v. Mathews, 420 F. Supp.
865, 870–71 (D. N.J. 1976).
Page 1-5 – Insert the following after the second paragraph:
For example, in Rumsfeld v. Forum for Academic and Institutional
Rights, Inc., 547 U.S. 47 (2006), the Supreme Court reversed a lower
court decision, 390 F.3d 219 (3rd Cir. 2004), and upheld the
constitutionality of the so-called “Solomon Amendment.” Originally
enacted as an appropriation rider and now codified as amended at 10
U.S.C. § 983, the Solomon Amendment generally prohibits the receipt of
certain federal funds by institutions of higher education that deny
military recruiters the same access they provide to other recruiters
on their campuses. The Forum for Academic and Institutional Rights
(FAIR), an association of law schools and faculty members, maintained
that the Solomon Amendment attached an unconstitutional condition to
their receipt of federal funds and, thus, exceeded congressional
constitutional authority under the so-called “Spending Clause” in
article I, section 8. Specifically, FAIR alleged that the statute
violated their First Amendment rights to oppose federal policies
regarding homosexuals in the military. In an 8–0 opinion by Chief
Justice Roberts, the Supreme Court rejected these arguments. Quoting
from Grove City College v. Bell, 465 U.S. 555, 575–76 (1984), the
Court noted that under the Spending Clause, “Congress is free to
attach reasonable and unambiguous conditions to federal financial
assistance that educational institutions are not obliged to accept.”
Rumsfeld, 547 U.S. at 59. In essence, the Court reasoned that funding
conditions such as the Solomon Amendment cannot violate the Spending
Clause if Congress could constitutionally impose the same requirements
through direct legislation. The Court went on to hold that Congress
could enact legislation that directly mandated the Solomon Amendment’s
requirements without running afoul of the First Amendment. Id. at 59–
60. The Court observed that Congress could use its authority under
article I, section 8, clauses 1 and 12–13 of the Constitution to
provide for the common defense and to raise and support armies, etc.,
as a basis for directly legislating the Solomon Amendment’s
requirements for equal access by military recruiters so long as the
legislation was otherwise constitutional. It then held that the
Solomon Amendment’s requirements did not implicate First Amendment
rights, dismissing each of FAIR’s arguments to the contrary. The
opinion stated by way of summary:
“The Solomon Amendment neither limits what law schools may say nor
requires them to say anything.... As a general matter, the Solomon
Amendment regulates conduct, not speech. It affects what law schools
must do—=afford equal access to military recruiters=—not what they may
or not say.”
Id. at 60 (emphasis in original).
Page 1-7 – Insert the following after the last paragraph:
In a 2007 decision, GAO declined to interpret the voluntary services
prohibition of the Antideficiency Act to prohibit the President from
exercising his constitutional power to make a recess appointment to an
individual who was barred by statute from receiving compensation. B-
309301, June 8, 2007. GAO noted that “serious constitutional issues
would arise if [the statutory bar on compensation], in conjunction
with the voluntary services prohibition, were read to directly
restrict the President from making a recess appointment.” Id. at 6.
Page 1-9 – Replace the first paragraph with the following:
In Kansas v. United States, 214 F.3d 1196, 1201–02, n.6 (10th Cir.
2000), cert. denied, 531 U.S. 1035 (2000), the court noted that there
were few decisions striking down federal statutory spending
conditions.9 However, there are two recent interesting examples of
situations in which courts invalidated a spending condition on First
Amendment grounds. In Legal Services Corp. v. Velasquez, 531 U.S. 533
(2001), a conditional provision (contained in the annual
appropriations for the Legal Service Corporation (LSC) since 1996) was
struck down as inconsistent with the First Amendment. This provision
prohibited LSC grantees from representing clients in efforts to amend
or otherwise challenge existing welfare law. The Supreme Court found
this provision interfered with the free speech rights of clients
represented by LSC-funded attorneys.10 In American Civil Liberties
Union (ACLU) v. Mineta, 319 F. Supp. 2d 69 (D.D.C. 2004), the court
declared unconstitutional an appropriation provision forbidding the
use of federal mass transit grant funds for any activity that promoted
the legalization or medical use of marijuana, for example, posting an
advertisement on a bus. Relying on Legal Services Corp., the court
held that the provision constituted “viewpoint discrimination” in
violation of the First Amendment. ACLU, 319 F. Supp. 2d at 83–87.
Page 1-10 – Insert the following after the first partial paragraph:
There have been some recent court cases upholding congressional
actions attaching conditions to the use of federal funds that require
states to waive their sovereign immunity from lawsuits under the
Eleventh Amendment. In these cases, courts found the condition a
legitimate exercise of Congress’s spending power. For example, the
court in Barbour v. Washington Metropolitan Transit Authority, 374
F.3d 1161 (D.C. Cir. 2004), cert. denied, 544 U.S. 904 (2005), upheld
a statutory provision known as the “Civil Rights Remedies Equalization
Act,” 42 U.S.C. § 2000d-7, which clearly conditioned a state’s
acceptance of federal funds on its waiver of its Eleventh Amendment
immunity to suits under various federal antidiscrimination laws. Among
other things, the court rejected an argument based on Dole that the
condition was not sufficiently related to federal spending. The
opinion observed that the Supreme Court has never overturned Spending
Clause legislation on “relatedness grounds.” Barbour, 374 F.3d at 1168.
Similarly, two courts rejected challenges to section 3 of the
Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA),
42 U.S.C. § 2000cc-1, which limits restrictions on the exercise of
religion by persons institutionalized in a program or activity that
receives federal financial assistance. Charles v. Verhagen, 348 F.3d
601 (7th Cir. 2003); Williams v. Bitner, 285 F. Supp. 2d 593 (M.D. Pa.
2003), aff’d in part, remanded in part 455 F.3d 186 (3rd Cir. 2006).
In Charles, the court held that RLUIPA “falls squarely within Congress’
pursuit of the general welfare under its Spending Clause authority.”
Charles, 348 F.3d at 607. The court also rejected the argument that
the statute’s restrictions could not be related to a federal spending
interest because the state corrections program at issue received less
than 2 percent of its budget from federal funding: “Nothing within
Spending Clause jurisprudence, or RLUIPA for that matter, suggests
that States are bound by the conditional grant of federal money only
if the State receives or derives a certain percentage ... of its
budget from federal funds.” Id. at 609.
Page 1-10 – Replace the second paragraph with the following:
For some additional recent cases upholding statutory funding
conditions, see Biodiversity Associates v. Cables, 357 F.3d 1152 (10th
Cir. 2004), cert. denied, 543 U.S. 817 (2004) (upholding an
appropriations rider that explicitly superseded a settlement agreement
the plaintiffs had reached with the Forest Service in environmental
litigation); Kansas v. United States, 214 F.3d 1196 (10th Cir. 2000),
cert. denied, 531 U.S. 1035 (2000) (upholding the statutory
requirement conditioning receipt of federal block grants used to
provide cash assistance and other supportive services to low income
families on a state’s participation in and compliance with a federal
child support enforcement program); Litman, 186 F.3d 544 (state
university’s receipt of federal funds was validly conditioned upon
waiver of the state’s Eleventh Amendment immunity from federal
antidiscrimination lawsuits); California v. United States, 104 F.3d
1086, 1092 (9th Cir. 1997) (acknowledging that although it originally
agreed to the condition for receipt of federal Medicaid funds on state
provision of emergency medical services to illegal aliens, California
now viewed that condition as coerced because substantial increases in
illegal immigration left California with no choice but to remain in
the program to prevent collapse of its medical system; the complaint
was dismissed for failure to state a claim upon which relief could be
granted); and Armstrong v. Vance, 328 F. Supp. 2d 50 (D.D.C. 2004) and
Whatley v. District of Columbia, 328 F. Supp. 2d 15 (D.D.C. 2004), aff’
d, 447 F.3d 814 (D.C. Cir. 2006) (two related decisions upholding
appropriations provisions that imposed a cap on the District of
Columbia’s payment of attorney fees awarded in litigation under the
Individuals with Disabilities Education Act, 20 U.S.C. §§ 1400–1490).
See also Richard W. Garnett, The New Federalism, the Spending Power,
and Federal Criminal Law, 89 Cornell L. Rev. 1 (Nov. 2003), an article
that provides more background on this general subject.
Page 1-12 – Replace the second bullet in the first paragraph with the
following:
Agencies may not spend, or commit themselves to spend, in advance of
or in excess of appropriations. 31 U.S.C. § 1341 (Antideficiency Act).
GAO has said that because the Antideficiency Act is central to
Congress’s core constitutional power of the purse, GAO will not
interpret general language in another statute, such as the
“notwithstanding any other provision of law” clause, to imply a waiver
of the Act without some affirmative expression of congressional intent
to give the agency the authority to obligate in advance or in excess
of an appropriation. B-303961, Dec. 6, 2004.
D. “Life Cycle” of an Appropriation:
2. Congressional Action:
Page 1-29 – Insert the following after the end of the second full
paragraph:
To reduce the federal deficit, the Budget Control Act of 2011 enacted
limits on discretionary spending for each fiscal year beginning with
fiscal year 2012 through fiscal year 2021. Pub. L. No. 112-25, § 101,
125 Stat. 240, 245 (Aug. 2, 2011) (amending § 251 of the Balanced
Budget and Emergency Deficit Control Act of 1985, Pub. L. No. 99-177,
99 Stat. 1037, 1063–1072 (Dec. 12, 1985), 2 U.S.C. § 901). The Act
also established the Joint Select Committee on Deficit Reduction to
propose by November 23, 2011, legislation to reduce the deficit by at
least $1.5 trillion over that same period. Pub. L. No. 112-25, §
401(b)(2), (b)(3)(B)(i), 125 Stat. at 259–60. The Act provides that
unless a joint committee bill achieving an amount greater than $1.2
trillion in deficit reduction is enacted by January 15, 2012, the
limits on discretionary spending set forth in section 251(c) shall be
revised as set out in the new section 251A. Pub. L. No. 112-25, §
302(a), 125 Stat. at 256–59 (adding section 251A to the Balanced
Budget and Emergency Deficit Control Act of 1985, 2 U.S.C. § 901a).
The joint committee did not report proposed legislation by the
statutory deadline; consequently, no bill was enacted in January 2012.
The Act enforces the spending limits through sequestration, which is
the cancellation of previously enacted budget authority. Section
251A(3) provides a formula for OMB to use to calculate the total
deficit reduction required for each fiscal year from fiscal years 2013
through 2021. 125 Stat. at 257. Section 251A(4) provides that OMB
shall allocate on January 2, 2013 the total deficit reduction for
fiscal year 2013 to defense and nondefense functions. Id., 2 U.S.C. §
901a(4).
3. Budget Execution and Control:
Page 1-32 – Replace the first full paragraph with the following:
While an agency’s basic mission is to carry out its programs with the
funds Congress has appropriated, there is also the possibility that,
for a variety of reasons, the full amount appropriated by Congress
will not be expended or obligated by the administration. Under the
Impoundment Control Act of 1974, an impoundment is an action or
inaction by an officer or employee of the United States that delays or
precludes the obligation or expenditure of budget authority provided
by Congress. 2 U.S.C. §§ 682(1), 683.60 The Act applies to “Salaries
and Expenses” appropriations as well as program appropriations. See,
e.g., B-320091, July 23, 2010; 64 Comp. Gen. 370, 375–76 (1985).
Page 1-33 – Replace the first full paragraph with the following:
A rescission involves the cancellation of budget authority previously
provided by Congress (before that authority would otherwise expire),
and can be accomplished only through legislation. See, e.g., B-322906,
July 19, 2012 (update of statistical data concerning rescissions
proposed and enacted since the passage of the Impoundment Control Act
of 1974 through fiscal year 2011); GAO, Impoundment Control Act: Use
and Impact of Rescission Procedures, GAO-10-320T (Dec. 16, 2009)
(testimony containing useful charts and reflections on the use of
rescissions as a budget tool). The President must advise Congress of
any proposed rescissions, again in a special message. The President is
authorized to withhold budget authority that is the subject of a
rescission proposal for a period of 45 days of continuous session
following receipt of the proposal. Unless Congress acts to approve the
proposed rescission within that time, the budget authority must be
made available for obligation. 2 U.S.C. §§ 682(3), 683, 688.[Footnote
63]
Page 1-34 – Insert the following after the first partial paragraph:
In 2006, GAO reported to Congress that in 13 instances executive
agencies had impounded funds that the President had proposed for
cancellation. B-308011, Aug. 4, 2006; B-307122.2, Mar. 2, 2006. When
the President proposed cancellation of these funds, the Administration
had not submitted reports of impoundments under the Impoundment
Control Act because, officials explained, the Administration was not
withholding funds from obligation. In all 13 instances, the agencies
released impounded funds as a result of GAO’s inquiries. Id.
E. The Role of the Accounting Officers: Legal Decisions:
2. Decisions of the Comptroller General:
Page 1-40 – Replace the last partial paragraph with the following:
There is no specific procedure for requesting a decision from the
Comptroller General. A simple letter is usually sufficient. The
request should, however, include all pertinent information or
supporting material and should present any arguments the requestor
wishes to have considered. See GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006),
available at [hyperlink, www.gao.gov/legal/resources.html].
Page 1-41 – Replace the last partial paragraph with the following:
An involved party or agency may request reconsideration of a decision.
The standard applied is whether the request demonstrates error of fact
or law (e.g., B-184062, July 6, 1976) or presents new information not
considered in the earlier decision. See B-306666.2, Mar. 20, 2009; B-
271838.2, May 23, 1997. While the Comptroller General gives
precedential weight to prior decisions,70 a decision may be modified
or overruled by a subsequent decision. In overruling its decisions,
GAO tries to follow the approach summarized by the Comptroller of the
Treasury in a 1902 decision:
“I regret exceedingly the necessity of overruling decisions of this
office heretofore made for the guidance of heads of departments and
the protection of paying officers, and fully appreciate that certainty
in decisions is greatly to be desired in order that uniformity of
practice may obtain in the expenditure of the public money, but when a
decision is made not only wrong in principle but harmful in its
workings, my pride of decision is not so strong that when my attention
is directed to such decision I will not promptly overrule it. It is a
very easy thing to be consistent, that is, to insist that the horse is
16 feet high, but not so easy to get right and keep right.”
8 Comp. Dec. 695, 697 (1902).
Page 1-42 – Replace the third full paragraph with the following:
For example, as we discussed earlier in this chapter, effective June
30, 1996, Congress transferred claims settlement authority under 31
U.S.C. § 3302 to the Director of the Office of Management and Budget
(OMB). Congress gave the director of OMB the authority to delegate
this function to such agency or agencies as he deemed appropriate.
See, e.g., B-302996, May 21, 2004 (GAO no longer has authority to
settle a claim for severance pay); B-278805, July 21, 1999 (the
International Trade Commission was the appropriate agency to resolve
the subject claims request).
Page 1-42 – Replace the fourth full paragraph with the following:
Other areas where the Comptroller General will decline to render
decisions include questions concerning which the determination of
another agency is by law “final and conclusive.” Examples are
determinations on the merits of a claim against another agency under
the Federal Tort Claims Act (28 U.S.C. § 2672) or the Military
Personnel and Civilian Employees’ Claims Act of 1964 (31 U.S.C. §
3721). See, e.g., B-300829, Apr. 4, 2004 (regarding the Military
Personnel and Civilian Employees’ Claims Act). Another example is a
decision by the Secretary of Veterans Affairs on a claim for veterans’
benefits (38 U.S.C. § 511). See B-266193, Feb. 23, 1996; 56 Comp. Gen.
587, 591 (1977); B-226599.2, Nov. 3, 1988 (nondecision letter).
Page 1-44 – Replace the second paragraph with the following:
Another long-standing GAO policy concerns the constitutionality of
acts of Congress. As an agent of Congress, GAO recognizes that it is
neither our role nor our province to opine on or adjudicate the
constitutionality of duly enacted statutes. See, e.g., B-321982, Oct.
11, 2011, at 4. Such laws come to GAO with a heavy presumption in
favor of their constitutionality and, like the courts, GAO will
construe statutes narrowly to avoid constitutional issues.77
Immigration & Naturalization Service v. St. Cyr, 553 U.S. 289, 299
n.12 (2001); B-300192, Nov. 13, 2002 (regarding a provision in the
fiscal year 2003 Continuing Resolution, Pub. L. No. 107-229, § 117,
116 Stat. 1465, 1468 (Sept. 30, 2002), prohibiting the use of
appropriations to acquire private sector printing and specifically
prohibiting the use of appropriations to pay for printing the President’
s Budget other than through the Government Printing Office: “Given our
authority to settle and audit the accounts of the government . . ., we
will apply laws as we find them absent a controlling opinion that such
laws are unconstitutional”). GAO will, however, express its opinion,
upon the request of a Member or committee of Congress, on the
constitutionality of a bill prior to enactment. E.g., B-360241, Mar.
18, 2003; B-300192, supra; B-228805, Sept. 28, 1987.
3. Other Relevant Authorities:
Page 1-48 – Replace paragraph number 7 with the following:
7. A Glossary of Terms Used in the Federal Budget Process, GAO-05--
734SP (Washington, D.C.: Sept. 2005)—This publication contains
standard definitions of fiscal and budgetary terms. It is published by
GAO as required by 31 U.S.C. § 1112(c), and is updated periodically.
[End of section]
Chapter 2: The Legal Framework:
B. Some Basic Concepts:
1. What Constitutes an Appropriation:
Page 2-20 – Insert the following after the second full paragraph:
Subsequent to the Core Concepts and AINS decisions, the Third Circuit
Court of Appeals had occasion to weigh in on the issue of revolving
funds in a non-Tucker Act situation in American Federation of
Government Employees (AFGE) v. Federal Labor Relations Authority
(FLRA), 388 F.3d 405 (3rd Cir. 2004). In that case, AFGE, representing
Army depot employees, had proposed an amendment to the employees’
collective bargaining agreement that would have required the Army to
pay reimbursements of personal expenses incurred by the depot
employees as a result of canceled annual leave from a defense working
capital fund. When the Army objected that it had no authority to use
the working capital fund for personal expenses, AFGE appealed to FLRA.
FLRA agreed with the Army and ruled that the provision was “
nonnegotiable.” Citing FLRA decisions, Comptroller General decisions,
and federal court cases, FLRA concluded that the working capital fund,
a revolving fund, is treated as a continuing appropriation and, as
such, the fund was not available for reimbursement of personal
expenses.
The court agreed with FLRA that the defense working capital fund
consists of appropriated funds and is thus not available to pay the
personal expenses of Army employees. The court, however, rejected what
it called “FLRA’s blanket generalization that revolving funds are
always appropriations.” AFGE, 388 F.3d at 411. Instead, the court
applied a standard used by the Federal Circuit and the Court of
Federal Claims when addressing the threshold issue of Tucker Act
jurisdiction, a “clear expression” standard; that is, funds should be
regarded as “appropriated” absent a “clear expression by Congress that
the agency was to be separated from the general federal revenues.” Id.
at 410. The court observed in this regard:
“While that ‘clear expression’ standard arises in the context of
Tucker Act jurisprudence, we think it accurately reflects the broader
principle that one should not lightly presume that Congress meant to
surrender its control over public expenditures by authorizing an
entity to be entirely self-sufficient and outside the appropriations
process.... For this reason, the courts have sensibly treated agency
money as appropriated even when the agency is fully financed by
outside revenues, so long as Congress has not clearly stated that it
wishes to relinquish the control normally afforded through the
appropriations process.
"... We think the correct rule is that the characterization of a
government fund as appropriated or not depends entirely on Congress’
expression, whatever the actual source of the money and whether or not
the fund operates on a revolving rather than annualized basis.”
Id. at 410–11. In applying this standard to the particular funding
arrangement at issue, the court determined that the defense working
capital fund was not a nonappropriated fund instrumentality and upheld
the FLRA decision. “What matters is how Congress wishes to treat
government revenues, not the source of the revenues.” Id. at 413.
2. Specific versus General Appropriation:
Page 2-21 – Replace footnote number 38 with the following:
[38] A few are B-318426, Nov. 2, 2009; B-289209, May 31, 2002; B-
290011, Mar. 25, 2002; 64 Comp. Gen. 138 (1984); 36 Comp. Gen. 526
(1957); 17 Comp. Gen. 974 (1938); 5 Comp. Gen. 399 (1925). But see
also B-317139, June 1, 2009, at n.5.
3. Transfer and Reprogramming:
Page 2-24 – Replace footnote number 40 with the following:
[40] 7 Comp. Gen. 524 (1928); 4 Comp. Gen. 848 (1925); 17 Comp. Dec.
174 (1910). Cases in which adequate statutory authority was found to
exist are B-302760, May 17, 2004 (the transfer of funds from the
Library of Congress to the Architect of the Capitol for construction
of a loading dock at the Library is authorized) and B-217093, Jan. 9,
1985 (the transfer from the Japan-United States Friendship Commission
to the Department of Education to partially fund a study of Japanese
education is authorized).
Page 2-25 – Insert the following after the first full paragraph:
In 2007, GAO found that the Department of Homeland Security’s (DHS)
Preparedness Directorate had authority pursuant to 31 U.S.C. § 1534,
the “account adjustment statute,” to fund shared services that
benefited the directorate as a whole by initially obligating the
services against one appropriation within the directorate and then
allocating the costs to the benefiting appropriations. However, the
Directorate did not appear to properly allocate the costs. To the
extent it did not properly record its obligations prior to the end of
the fiscal year against each benefiting appropriation for the
estimated value of the services each appropriation received, as
required by the account adjustment statute, the Directorate improperly
augmented its appropriations. B-308762, Sept. 17, 2007.
Page 2-26 – Insert the following after the third paragraph:
As mentioned above, Congress may also authorize one agency to transfer
funds to another agency. For example, under 49 U.S.C. § 5309(m)(6),
the Federal Transit Administration (FTA) is required to make a
designated amount of funds appropriated to its capital investment
grant program available to the Denali Commission. This authority is
discussed in B-319189, Nov. 12, 2010 (finding that, because FTA has
specific direction to transfer the funds, these transfers should be
made using the Department of Treasury’s nonexpenditure transfer
procedures, not the Economy Act or other interagency agreements).
Page 2-28 – Replace the first full paragraph with the following:
The FEDLINK decision references a situation that GAO addressed in 1944
with regard to a no-year revolving fund called the Navy Procurement
Fund. 23 Comp. Gen. 668 (1944). The Navy incorrectly believed that
because the revolving fund was not subject to fiscal year limitation,
advances to the fund made from annual appropriations were available
until expended. A number of other GAO decisions, several predating the
enactment of 31 U.S.C. § 1532, have made essentially the same point—
that, except to the extent the statute authorizing a transfer provides
otherwise, transferred funds are available for purposes permissible
under the donor appropriation and are subject to the same limitations
and restrictions applicable to the donor appropriation. An example of
this is the Economy Act, 31 U.S.C. § 1535.44 See also B-317878, Mar.
3, 2009 (amounts appropriated to the United States Postal Service
Office of Inspector General (OIG) “to be derived by transfer from the
Postal Service Fund” retain their no-year character and remain
available for OIG obligations without fiscal year limitation).
Page 2-28 – Insert the following, including the reference to new
footnote number 44a, after the first full paragraph:
In another case, GAO found that the Department of Defense (DOD)
improperly “parked” DOD funds when it transferred the funds to a
Department of the Interior franchise fund, GovWorks.[Footnote 44a] B-
308944, July 17, 2007. “Parking” is a term used to describe a transfer
of appropriations to a revolving fund to extend the availability of
the appropriations. GovWorks is a revolving fund established to
provide common administrative services to Interior and other agencies
by procuring goods and services from vendors on behalf of federal
agencies on a competitive basis. DOD used Military Interdepartmental
Purchase Requests (MIPRs) to transfer funds to GovWorks but did not
identify the specific items or services that DOD wanted GovWorks to
acquire on its behalf until after the funds had expired. DOD
subsequently improperly directed GovWorks to use expired DOD funds for
contracts in violation of the bona fide needs rule.
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[44a] GovWorks is officially known as the Acquisition Services
Directorate. See [hyperlink, http://www.aqd.nbc.gov] (last visited
Dec. 30, 2010).
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insert new footnote number 48a as follows:
Thus, as a matter of law, an agency is free to reprogram unobligated
funds as long as the expenditures are within the general purpose of
the appropriation and are not in violation of any other specific
limitation or otherwise prohibited. E.g., B-279338, Jan. 4, 1999; B-
123469, May 9, 1955. This is true even though the agency may already
have administratively allotted the funds to a particular object. 20
Comp. Gen. 631 (1941). In some situations, an agency may be required
to reprogram funds to satisfy other obligations. E.g., Cherokee Nation
of Oklahoma v. Leavitt, 543 U.S. 631, 641–43 (2005) (government must
reprogram unrestricted funds to cover contractual obligations);48a
Blackhawk Heating & Plumbing, 622 F.2d at 552 n.9 (satisfaction of
obligations under a settlement agreement).
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[48a] In this case, the government had argued that its contracts with
Indian tribes were not “ordinary procurement contracts,” so it was not
legally bound to pay certain contract costs unless Congress
appropriated sufficient funds for that purpose. The Court found the
tribal contracts to be binding in the same way as ordinary contractual
promises and that the government would have to reprogram
appropriations to fulfill its contractual obligations to the tribes,
notwithstanding that the government may have planned to use those
appropriations for other purposes that the government felt were
critically important.
4. General Provisions: When Construed as Permanent Legislation:
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Since an appropriation act is made for a particular fiscal year, the
starting presumption is that everything contained in the act is
effective only for the fiscal year covered. Thus, the rule is: A
provision contained in an annual appropriation act is not to be
construed to be permanent legislation unless the language used therein
or the nature of the provision makes it clear that Congress intended
it to be permanent. The presumption can be overcome if the provision
uses language indicating futurity or if the provision is of a general
character bearing no relation to the object of the appropriation. B-
319414, June 9, 2010; 65 Comp. Gen. 588 (1986); 62 Comp. Gen. 54
(1982); 36 Comp. Gen. 434 (1956); 32 Comp. Gen. 11 (1952); 24 Comp.
Gen. 436 (1944); 10 Comp. Gen. 120 (1930); 5 Comp. Gen. 810 (1926);
7 Comp. Dec. 838 (1901).
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Words of futurity other than hereafter have also been deemed
sufficient. Thus, there is no significant difference in meaning
between hereafter and “after the date of approval of this act.” 65
Comp. Gen. at 589; 36 Comp. Gen. at 436; B-209583, Jan. 18, 1983.
Similarly, an appropriations provision requiring an agency action “not
later than one year” after enactment of the appropriations act, which
would occur after the end of the fiscal year, is permanent because
that prospective language indicates an intention that the provision
survive past the end of the fiscal year. B-319414, June 9, 2010. Using
a specific date rather than a general reference to the date of
enactment produces the same result. B-287488, June 19, 2001; B-57539,
May 3, 1946. “Henceforth” may also do the job. B-209583. So may
specific references to future fiscal years. B-208354, Aug. 10, 1982.
On the other hand, the word “hereinafter” was not considered
synonymous with hereafter by the First Circuit Court of Appeals and
was not deemed to establish a permanent provision. Atlantic Fish
Spotters Ass’n, 321 F.3d 220. Rather, the court held that hereinafter
is understood to refer only to what follows in the same writing (i.e.,
statute). Id. at 225–26.
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The words “this or any other act” may be used in conjunction with
other language that makes the result, one way or the other,
indisputable. The provision is clearly not permanent if the phrase “
during the current fiscal year” is added. Norcross v. United States,
142 Ct. Cl. 763 (1958). Addition of the phrase “with respect to any
fiscal year” would indicate, all other potential considerations aside,
that Congress intended the provision to be permanent. B-230110, Apr.
11, 1988. For example, in the 2006 Department of Justice
Appropriations Act, as part of the language of ATF’s Salaries and
Expenses appropriation, Congress included a proviso stating that “no
funds appropriated under this or any other Act with respect to any
fiscal year may be used to disclose part or all of the contents of the
Firearms Trace System database” to anyone other than a law enforcement
agency or a prosecutor in connection with a criminal investigation or
prosecution. Pub. L. No. 109-108, title I, 119 Stat. 2290, 2295 (Nov.
22, 2005). In B-309704, Aug. 28, 2007, GAO determined that the proviso
constituted permanent legislation because the forward-looking effect
of the phrase “this or any other Act” coupled with the phrase “with
respect to any fiscal year” indicates Congress’s intention that the
provision be permanent. See also B-316510, July 15, 2008 (a
similar proviso in ATF’s 2008 appropriation, using the phrase “
beginning in fiscal year 2008 and thereafter,” is also permanent law).
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The inclusion of a provision in the United States Code is relevant as
an indication of permanence but is not controlling. B-319414, June 9,
2010; 36 Comp. Gen. 434; 24 Comp. Gen. 436. Failure to include a
provision in the Code would appear to be of no significance. A
reference by the codifiers to the failure to reenact a provision
suggests nonpermanence. 41 Op. Att’y Gen. at 280–81.
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The degree of relationship between a given provision and the object of
the appropriation act in which it appears or the appropriating
language to which it is appended is a factor to be considered. If the
provision bears no direct relationship to the appropriation act in
which it appears, this is an indication of permanence. For example, a
provision prohibiting the retroactive application of an energy tax
credit provision in the Internal Revenue Code was found sufficiently
unrelated to the rest of the act in which it appeared, a supplemental
appropriations act, to support a conclusion of permanence. B-214058,
Feb. 1, 1984. See also B-319414, June 9, 2010; 62 Comp. Gen. at 56; 32
Comp. Gen. 11; 26 Comp. Gen. at 357; B-37032, Oct. 5, 1943; A-88073,
Aug. 19, 1937. The closer the relationship, the less likely it is that
the provision will be viewed as permanent. A determination under rules
of the Senate that a proviso is germane to the subject matter of the
appropriation bill will negate an argument that the proviso is
sufficiently unrelated as to suggest permanence. B-208705, Sept. 14,
1982.
The phrasing of a provision as positive authorization rather than a
restriction on the use of an appropriation is an indication of
permanence, but usually has been considered in conjunction with a
finding of adequate words of futurity. B-319414, June 9, 2010; 36
Comp. Gen. 434; 24 Comp. Gen. 436. An early decision, 17 Comp. Dec.
146 (1910), held a proviso to be permanent based solely on the fact
that it was not phrased as a restriction on the use of the
appropriation to which it was attached, but this decision seems
inconsistent with the weight of authority and certainly with the
Supreme Court’s decision in Minis v. United States, cited above.
Finally, a provision may be construed as permanent if construing it as
temporary would render the provision meaningless or produce an absurd
result. 65 Comp. Gen. 352 (1986); 62 Comp. Gen. 54; B-200923, Oct. 1,
1982. These decisions dealt with a general provision designed to
prohibit cost-of-living pay increases for federal judges “except as
may be specifically authorized by Act of Congress hereafter enacted.”
Pub. L. No. 97-92, § 140, 95 Stat. 1183, 1200 (Dec. 15, 1981). The
provision appeared in a fiscal year 1982 continuing resolution, which
expired on September 30, 1982. The next applicable pay increase would
have been effective October 1, 1982. Thus, if the provision were not
construed as permanent, it would have been meaningless “since it would
have been enacted to prevent increases during a period when no
increases were authorized to be made.” 62 Comp. Gen. at 56–57.55
Similarly, a provision was held permanent in 9 Comp. Gen. 248 (1929)
although it contained no words of futurity, because it was to become
effective on the last day of the fiscal year and an alternative
construction would have rendered it effective for only one day,
clearly not the legislative intent. See also B-319414, June 9, 2010; B-
270723, Apr. 15, 1996; 65 Comp. Gen. at 590; B-214058, Feb. 1, 1984.
C. Relationship of Appropriations to Other Types of Legislation:
1. Distinction between Authorization and Appropriation:
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There is no general requirement, either constitutional or statutory,
that an appropriation act be preceded by a specific authorization act.
E.g., 71 Comp. Gen. 378, 380 (1992). The existence of a statute
(organic legislation) imposing substantive functions upon an agency
that require funding for their performance is itself sufficient
authorization for the necessary appropriations. B-173832, July 16,
1976; B-173832, Aug. 1, 1975; B-111810, Mar. 8, 1974. Moreover,
expiration of an authorization of appropriations does not prohibit an
agency from using available appropriations to carry out a program
required or permitted by existing enabling legislation. B-323433, Aug.
14, 2012 (Social Security Administration has adequate authority under
organic legislation to continue mandatory and discretionary grant
programs upon the expiration of an authorization of appropriations).
However, statutory requirements for authorizations do exist in a
number of specific situations. An example is section 660 of the
Department of Energy Organization Act, 42 U.S.C. § 7270
(“Appropriations to carry out the provisions of this chapter shall be
subject to annual authorization”). Another example is 10 U.S.C. §
114(a), which provides that no funds may be appropriated for military
construction, military procurement, and certain related research and
development “unless funds therefor have been specifically authorized
by law.”
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An authorization act is basically a directive to Congress itself,
which Congress is free to follow or alter (up or down) in the
subsequent appropriation act. B-323433, Aug. 14, 2012. A statutory
requirement for prior authorization is also essentially a
congressional mandate to itself. Thus, for example, if Congress
appropriates money to the Defense Department in violation of 10 U.S.C.
§ 114, there are no practical consequences. The appropriation is just
as valid, and just as available for obligation, as if section 114 had
been satisfied or did not exist.
2. Specific Problem Areas and the Resolution of Conflicts:
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Second, Congress is free to amend or repeal prior legislation as long
as it does so directly and explicitly and does not violate the
Constitution. It is also possible for one statute to implicitly amend
or repeal a prior statute, but it is firmly established that “repeal
by implication” is disfavored, and statutes will be construed to avoid
this result whenever reasonably possible. E.g., Tennessee Valley
Authority v. Hill, 437 U.S. 153, 189–90 (1978); Morton v. Mancari, 417
U.S. 535, 549 (1974); Posadas v. National City Bank of New York, 296
U.S. 497, 503 (1936); B-307720, Sept. 27, 2007; B-290011, Mar. 25,
2002; B-261589, Mar. 6, 1996; 72 Comp. Gen. 295, 297 (1993); 68 Comp.
Gen. 19, 22–23 (1988); 64 Comp. Gen. 142, 145 (1984); 58 Comp. Gen.
687, 691–92 (1979); B-258163, Sept. 29, 1994; B-236057, May 9, 1990.
Repeals by implication are particularly disfavored in the
appropriations context. Robertson v. Seattle Audubon Society, 503 U.S.
429, 440 (1992).
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A corollary to the “cardinal rule” against repeal by implication, or
perhaps another way of saying the same thing, is the rule of
construction that statutes should be construed harmoniously so as to
give maximum effect to both wherever possible. E.g., Posadas, 296 U.S.
at 503; Strawser v. Atkins, 290 F.3d 720 (4th Cir. 2002), cert.
denied, 537 U.S. 1045 (2002); B-290011, Mar. 25, 2002; 53 Comp. Gen.
853, 856 (1974); B-208593.6, Dec. 22, 1988. See B-307720, Sept. 27,
2007, and B-258000, Aug. 31, 1994, for examples of harmonizing
ambiguous appropriation and authorization provisions in order to
effectuate congressional intent.
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Third, if two statutes are in irreconcilable conflict, the more recent
statute, as the latest expression of Congress, governs. As one court
concluded in a statement illustrating the eloquence of simplicity, “
[t]he statutes are thus in conflict, the earlier permitting and the
later prohibiting,” so the later statute supersedes the earlier.
Eisenberg v. Corning, 179 F.2d 275, 277 (D.C. Cir. 1949). In a sense,
the “last in time” rule is yet another way of expressing the repeal by
implication principle. We state it separately to highlight its
narrowness: it applies only when the two statutes cannot be reconciled
in any reasonable manner, and then only to the extent of the conflict.
E.g., B-308715, Apr. 20, 2007 (“It is well established that a later
enacted, specific statute will typically supersede a conflicting
previously enacted, general statute to the extent of the inconsistency.”
). See also Posadas, 296 U.S. at 503; B-255979, Oct. 30,
1995; B-226389, Nov. 14, 1988; B-214172, July 10, 1984, aff’d upon
reconsideration, 64 Comp. Gen. 282 (1985).
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The Supreme Court determined that the “subject to the availability of
appropriations” language conditions the Act’s entitlement, but that
condition is fulfilled when Congress appropriates “sufficient legally
unrestricted” funds to meet its Indian Self-Determination and
Education Assistance Act obligations “even if an agency’s total lump-
sum appropriation is insufficient to pay all the contracts the agency
has made.” Cherokee Nation of Oklahoma v. Leavitt, 543 U.S. 631, 637
(2005). Cherokee Nation addressed a lump sum appropriation. In a later
case, the Court addressed a lump sum appropriation that included a
“not to exceed” proviso. The Court held that the Act requires the
government to pay the full amount of contract support costs,
notwithstanding the “not to exceed” amount, as long as “Congress
appropriated adequate funds to pay in full any individual contractor.”
Salazar v. Ramah Navajo Chapter, ___ U.S. ___, 132 S. Ct. 2181, 2191
(2012).
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By 1971, however, Congress was enacting (and continues to enact) a
general provision in all appropriation acts: “[n]o part of any
appropriation contained in this Act shall remain available for
obligation beyond the current fiscal year unless expressly so provided
herein.” Now, if an appropriation act contains the provision quoted in
the preceding paragraph, it will not be sufficient for an
appropriation contained in that act to merely incorporate a multiple
year or no-year authorization by reference. The effect of this general
provision is to require the appropriation language to expressly
provide for availability beyond one year in order to overcome the
enacting clause. B-319734, July 26, 2010; 50 Comp. Gen.
857 (1971).
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For purposes of the rule of 50 Comp. Gen. 857 and its progeny, it
makes no difference whether the authorization is in an annual
authorization of appropriations act or in permanent enabling
legislation. It also appears to make no difference whether the
authorization merely authorizes the longer period of availability or
directs it. See, for example, 58 Comp. Gen. 321, in which the general
provision restricting availability to the current fiscal year, as the
later expression of congressional intent, was held to override 25
U.S.C. § 13a, which provides that the unobligated balances of certain
Indian assistance appropriations “shall remain available for
obligation and expenditure” for a second fiscal year. See also B-
319734, July 26, 2010; 71 Comp. Gen. 39, 40 (1991); B-249087, June 25,
1992. Similarly, in Dabney v. Reagan, No. 82 Civ. 2231-CSH (S.D. N.Y.
June 6, 1985), the court held that a two-year period of availability
specified in appropriation acts would override a “mandatory” no-year
authorization contained in the Solar Energy and Energy Conservation
Bank Act.
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reference to new footnote number 60a, after the first full paragraph:
In 2004, two courts interpreted appropriation restrictions to avoid
repeal by implication: City of Chicago v. Department of the Treasury,
384 F.3d 429 (7th Cir. 2004), and City of New York v. Beretta U.S.A.
Corp., 222 F.R.D. 51 (E.D. N.Y. 2004). In the first case, the City of
Chicago had sued the former Bureau of Alcohol, Tobacco, and Firearms
under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, to obtain
access to certain information from the agency’s firearms databases.
The Court of Appeals for the Seventh Circuit held that the information
was not exempt from disclosure under FOIA. City of Chicago v.
Department of the Treasury, 287 F.3d 628 (7th Cir. 2002). The agency
then appealed to the Supreme Court. While the appeal was pending,
Congress enacted appropriations language for fiscal years 2003 and
2004 providing that no funds shall be available or used to take any
action under FOIA or otherwise that would publicly disclose the
information. Pub. L. No. 108-7, div. J, title VI, § 644, 117 Stat. 11,
473 (Feb. 20, 2003); Pub. L. No. 108-199, div. B, title I, 118 Stat.
3, 53 (Jan. 23, 2004). The Supreme Court remanded the case to the
Seventh Circuit to consider the impact, if any, of the appropriations
language. Department of Justice v. City of Chicago, 537 U.S. 1229
(2003). In City of Chicago v. Department of the Treasury, 384 F.3d 429
(7th Cir. 2004), the court decided that the appropriations language
had essentially no impact on the case. Citing a number of cases on the
rule disfavoring implied repeals (particularly by appropriations act),
the court held that the appropriations rider did not repeal FOIA or
otherwise affect the agency’s legal obligation to release the
information in question. The court concluded that “FOIA deals only
peripherally with the allocation of funds—its main focus is to ensure
agency information is made available to the public.” City of Chicago,
384 F.3d at 435. In this regard, the court repeatedly emphasized the
minimal costs entailed in complying with the access request and
concluded that “there is no ‘irreconcilable conflict’ between
prohibiting the use of federal funds to process the request and
granting the City access to the databases.” Id. After the 2004
decision, the agency filed a request for rehearing. Before the
rehearing, Congress passed the Consolidated Appropriations Act of 2005
specifying that no funds be used to provide the data sought by the
City, and further provided that the data be “immune from judicial
process.” Pub. L. No. 108-447, div. B, title I, 118 Stat. 2809, 2859
(Dec. 8, 2004). The court determined that this statutory language
showed that Congress’s “obvious intention ... was to cut off all
access to the databases for any reason.” City of Chicago v. Department
of the Treasury, 423 F.3d 777, 780 (7th Cir. 2005).
The second case, City of New York v. Beretta U.S.A. Corp., 222
F.R.D. 51 (E.D. N.Y. 2004), concerned access to firearms information
that was subject to the same appropriations language for fiscal year
2004 in Public Law 108-199.60a In this case, the demand for access
took the form of subpoenas seeking discovery of the records in a tort
suit by the City of New York and others against firearms manufacturers
and distributors. The court in City of New York denied the agency’s
motion to quash the subpoenas, which was based largely on the
appropriations language. The court held that the appropriations
language, which prohibited public disclosure, was inapplicable by its
terms since discovery could be accomplished under a protective order
that would keep the records confidential. City of New York, 222 F.R.D.
at 56–65.
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60a The litigation did not address whether the provisions were to be
read as temporary or permanent. B-309704, Aug. 28, 2007, at 2 n.1. See
also B-316510, July 15, 2008.
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It has also been held that, as a general proposition, the
appropriation of funds for a program whose funding authorization has
expired, or is due to expire during the period of availability of the
appropriation, provides sufficient legal basis to continue the program
during that period of availability, absent indication of contrary
congressional intent. B-323433, Aug. 14, 2012. 65 Comp. Gen. 524
(1986); 65 Comp. Gen. 318, 320–21 (1986); 55 Comp. Gen. 289 (1975); B
131935, Mar. 17, 1986; B 137063, Mar. 21, 1966. For example, the
Social Security Administration (SSA) should continue mandatory and
discretionary grant programs, even when faced with expired
authorizations of appropriations, where the relevant enabling
legislation had not expired and the agency had an appropriation
available to cover the costs of the programs. B-323433, Aug. 14, 2012.
Following the enactment of legislation establishing the Work
Incentives Planning and Assistance Program and the Protection and
Advocacy for Beneficiaries of Social Security Program, Congress passed
authorizations of appropriations to carry out the functions. SSA
asserted that it could not continue the programs upon the expiration
of the authorization of appropriations. Reminding SSA that there is no
general requirement that an authorization of appropriations precede an
appropriation, GAO held that enabling legislation provided the
requisite authority to obligate agency appropriations in those
situations where authorizations expire. The result in these cases
follows in part from the fact that the total absence of appropriations
authorization legislation would not have precluded the making of valid
appropriations for the programs. E.g., B-202992, May 15, 1981. In
addition, as noted, the result is premised on the conclusion, derived
either from legislative history or at least the absence of legislative
history to the contrary, that Congress did not intend for the programs
to terminate.[Footnote 61]
D. Statutory Interpretation: Determining Congressional Intent:
1. The Goal of Statutory Construction:
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Of course, there are those rare occasions when two statutory
provisions are just irreconcilable. Even then there is a statutory
construction principle called the “last-in-time” rule. For example, in
B-303268, Jan. 3, 2005, at issue was what Congress intended in
enacting a “notwithstanding” clause in the State Department’s fiscal
year 2004 appropriations. Congress had appropriated a lump sum of $35
million to the Economic Support Fund for assistance to Lebanon,
available “notwithstanding any other provision of law.” Pub.
L. No. 108-7, div. E, title V, § 534(a), 117 Stat. 11, 193 (Feb. 20,
2003). Five months earlier, in the 2003 Foreign Relations
Authorization Act, Congress had included a provision, “notwithstanding
any other provision of law,” restricting from obligation $10 million “
made available in fiscal year 2003 or any subsequent fiscal year” to
the Economic Support Fund for assistance to Lebanon until the
President submitted certain findings to Congress. Pub. L. No. 107-228,
§ 1224, 116 Stat. 1350, 1432 (Sept. 30, 2002). The two “notwithstanding”
clauses presented an irreconcilable conflict that GAO resolved by
applying the “last-in-time” rule of construction—that is, we presume
that the later-enacted statute represents Congress’s current
expression of the law (i.e., Congress’s “last word”). Consequently,
the “notwithstanding” clause of the appropriation act superseded the
authorization act’s “notwithstanding” clause. However, in this case
the appropriation act’s “notwithstanding” clause had effect only for
fiscal year 2004. The authorization act’s clause was permanent law.
Thus the appropriation act’s clause superseded the authorization act’s
clause only for fiscal year 2004, unless similar appropriation act
provisions were enacted for subsequent fiscal years.
The last-in-time rule was also applied in B-316510, July 15, 2008.
That case involved two provisos, contained in the fiscal years 2006
and 2008 appropriations acts, regarding the disclosure of certain
information maintained by the Bureau of Alcohol, Tobacco, Firearms,
and Explosives (ATF), both of which contained the necessary words of
futurity to make them permanent law. The 2008 proviso specifically
authorized disclosure in some circumstances that would not be
permitted under the 2006 proviso. Because it was passed later in time,
GAO concluded that the 2008 proviso superseded the 2006 proviso with
respect to those particular disclosures.
2. The “Plain Meaning” Rule:
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By far the most important rule of statutory construction is this: You
start with the language of the statute. Countless judicial decisions
reiterate this rule. E.g., Carcieri v. Salazar, 555 U.S. ___, 129 S.
Ct. 1058 (2009); BedRoc Limited, LLC v. United States, 541 U.S. 176
(2004); Lamie v. United States Trustee, 540 U.S. 526 (2004); Hartford
Underwriters Insurance Co. v. Union Planters Bank, N.A., 530 U.S. 1
(2000); Robinson v. Shell Oil Co., 519 U.S. 337 (1997); Connecticut
National Bank v. Germain, 503 U.S. 249 (1992); Mallard v. United
States District Court for the Southern District of Iowa, 490 U.S. 296,
300 (1989). The primary vehicle for Congress to express its intent is
the words it enacts into law. As stated in an early Supreme Court
decision: “The law as it passed is the will of the majority of both
houses, and the only mode in which that will is spoken is in the act
itself; and we must gather their intention from the language there
used.” Aldridge v. Williams, 44 U.S. (3 How.) 9, 24 (1845). A somewhat
better known statement is from United States v. American Trucking
Ass’ns, 310 U.S. 534, 543 (1940): “There is, of course, no more
persuasive evidence of the purpose of a statute than the words by
which the legislature undertook to give expression to its wishes.”
Page 2-76 – Replace the last paragraph inserting new footnote number
68a as follows:
The extent to which sources outside the statute itself, particularly
legislative history, should be consulted to help shed light on the
statutory scheme has been the subject of much controversy in recent
decades.68a One school of thought, most closely identified with
Supreme Court Justice Antonin Scalia, holds that resort to legislative
history is never appropriate. This approach is sometimes viewed as a
variant of the plain meaning rule.69 A more widely expressed statement
of the plain meaning rule is that legislative history can be consulted
but only if it has first been determined that the statutory language
is “ambiguous”-—that is, that there is no plain meaning.
Page 2-76 – Insert the following for new footnote number 68a:
68a This discussion does not include outside sources that the statute
specifically incorporates by reference, which are generally viewed as
part of the statutory scheme. See, e.g., B-316010, Feb. 25, 2008
(various provisions of an appropriation act incorporated by reference
specified passages of an explanatory statement of the House Committee
on Appropriations that was printed in the Congressional Record and
contained specific allocations, which the agencies were required to
follow). For more on incorporation by reference, see section D.6.a of
this chapter.
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Whether the language of the statute is sufficiently ambiguous that a
court should look beyond it to legislative history can be difficult to
discern. In Zuni Public School District No. 89 v. Department of
Education, 550 U.S. 81 (2007), the Court was faced with interpreting
statutory language setting out a formula to be used by the Department
of Education in connection with state funding of school districts. In
a 5–4 decision, a majority of the court found the language in the
statute to be sufficiently ambiguous to permit it to consider other
indicators of congressional intent. The majority acknowledged that if
the intent of Congress was clearly and unambiguously expressed by the
statutory language, that would be the end of the Court’s analysis.
3. The Limits of Literalism: Errors in Statutes and “Absurd
Consequences:”
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The Supreme Court’s decision in Lamie v. United States Trustee, 540
U.S. 526 (2004), contained an interesting discussion of drafting
errors and what to do about them. For reasons that are described at
length in the opinion but need not be repeated here, the Court found
an “apparent legislative drafting error” in a 1994 statute. Lamie, 540
U.S. at 530. Nevertheless, the Court held that the amended language
must be applied according to its plain terms. While the Court in Lamie
acknowledged that the amended statute was awkward and ungrammatical,
and that a literal reading rendered some words superfluous and could
produce harsh results, none of these defects made the language
ambiguous. Id. at 534–36. The Court determined that these flaws did
not “lead to absurd results requiring us to treat the text as if it
were ambiguous.” Id. at 536. The Court also drew a distinction between
construing a statute in a way that, in effect, added missing words as
opposed to ignoring words that might have been included by mistake.
Id. at 538.
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Recent Supreme Court decisions likewise reinforce the need for caution
when it comes to departing from statutory language on the basis of its
apparent “absurd consequences.” See Lamie v. United States Trustee,
540 U.S. 526, 537–38 (2004) (“harsh” consequences are not the
equivalent of absurd consequences); Barnhart v. Thomas, 540 U.S. 20,
28–29 (2003) (“undesirable” consequences are not the equivalent of
absurd consequences).
4. Statutory Aids to Construction:
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Occasionally, the courts use the Dictionary Act to assist in resolving
questions of interpretation. E.g., Carr v. United States, ___ U.S. ___,
130 S. Ct. 2229, 2236 (2010) (Dictionary Act’s provision that
statutory “words used in the present tense include the future as well
as the present,” 1 U.S.C. § 1, interpreted to mean that the present
tense generally does not include the past tense); Gonzalez
v. Secretary for the Department of Corrections, 366 F.3d 1253, 1263–64
(11th Cir. 2004) (applying the Dictionary Act’s general rule that “
words importing the singular include and apply to several persons,
parties, or things,” 1 U.S.C. § 1); United States v. Reid, 206 F.
Supp. 2d 132 (D. Mass. 2002) (an aircraft is not a “vehicle” for
purposes of the USA PATRIOT Act); United States v. Belgarde, 148 F.
Supp. 2d 1104 (D. Mont.), aff’d, 300 F.3d 1177 (9th Cir. 2002) (a
government agency, which the defendant was charged with burglarizing,
is not a “person” for purposes of the Major Crimes Act). Courts also
hold on occasion that the Dictionary Act does not apply. See Rowland
v. California Men’s Colony, 506 U.S. 194 (1993) (context refutes
application of the title 1, United States Code, definition of “person”
); United States v. Ekanem, 383 F.3d 40 (2nd Cir. 2004) (“victim” as
used in the Mandatory Victims Restitution Act (MVRA) is not limited by
the default definition of “person” in the Dictionary Act since that
definition does not apply where context of MVRA indicates otherwise).
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Congress regularly passes laws that “codify,” or enact into positive
law, the contents of various titles of the United States Code. The
effect of such codifications is to make that United States Code title
the official evidence of the statutory language it contains.74
Codification acts typically delete obsolete provisions and make other
technical and clarifying changes to the statutes they codify.
Codification acts usually include language stating that they should
not be construed as making substantive changes in the laws they
replace. See, e.g., Pub. L. No. 97-258, § 4(a), 96 Stat. 877, 1067
(1982) (codifying title 31 of the United States Code). See also
Scheidler v. National Organization for Women, 547 U.S. 9 (2006); 69
Comp. Gen. 691 (1990).75
5. Canons of Statutory Construction:
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Like all other courts, the Supreme Court follows this venerable canon.
E.g., United States v. Cleveland Indians Baseball Co., 532 U.S. 200,
217 (2001) (“it is, of course, true that statutory construction ‘is a
holistic endeavor’ and that the meaning of a provision is ‘clarified
by the remainder of the statutory scheme’”); FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120 (2000); Gustafson v. Alloyd Co., Inc., 513
U.S. 561, 569 (1995) (“the Act is to be interpreted as a symmetrical
and coherent regulatory scheme, one in which the operative words have
a consistent meaning throughout”); Brown v. Gardner, 513 U.S. 115, 118
(1994) (“ambiguity is a creature not of definitional possibilities but
of statutory context”). See also Hibbs v. Winn, 542 U.S. 88, 101
(2004) (courts should construe a statute so that “effect is given to
all its provisions, so that no part will be inoperative or
superfluous, void or insignificant”); General Dynamics Land Systems,
Inc. v. Cline, 540 U.S. 581, 598 (2004) (courts should not ignore “the
cardinal rule that statutory language must be read in context since a
phrase gathers meaning from the words around it”); B-321685, Mar. 14,
2011, at 4 (interpreting amendments to section 313 of the Clean Water
Act, 33 U.S.C. § 1323, enacted by Pub. L. No. 111-378: “The Supreme
Court has indicated that the meaning of a statute is to be determined
not just ‘by reference to the language itself,’ but also by reference
to ‘the specific context in which that language is used and the
broader context of the statute as a whole.’”).
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the following:
B-287158, Oct. 10, 2002 (citations omitted).77 See also B-318897, Mar.
18, 2010.
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revise the second bullet as follows:
* B-302335, Jan. 15, 2004: When read as a whole, the Emergency Steel
Loan Guarantee Act of 1999, 15 U.S.C. § 1841 note, clearly
appropriated loan guarantee programs funds to the Loan Guarantee Board
and not the Department of Commerce.
* B-316533, July 31, 2008: Reading the Homeland Security Act, Pub. L.
No. 107-296, 116 Stat. 2135 (Nov. 25, 2002), as a whole, GAO construed
the reorganization and congressional notification provisions in
section 872 as a limitation on any general or inherent authority of
the Secretary to reorganize the Department of Homeland Security that
may otherwise be inferred from sections 102(a)(2) and (a)(3).
* B-303961, Dec. 6, 2004: Despite use of the phrase “notwithstanding
any other provision of law” in a provision of an appropriation act,
nothing in the statute read as a whole or its legislative history
suggested an intended waiver of the Antideficiency Act. See also B-
290125.2, B-290125.3, Dec. 18, 2002 (redacted) (viewed in isolation,
the phrase “notwithstanding any other provision of law” might be read
as exempting a procurement from GAO’s bid protest jurisdiction under
the Competition in Contracting Act; however, when the statute is read
as a whole, as it must be, it does not exempt the procurement from the
Act).
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* Hibbs v. Winn, 542 U.S. 88, 101 (2004): “The rule against
superfluities complements the principle that courts are to interpret
the words of a statute in context.”
* Alaska Department of Environmental Conservation v. EPA, 540
U.S. 461, 489 n.13 (2004): A statute should be construed so that, “if
it can be prevented, no clause, sentence, or word shall be
superfluous, void, or insignificant.”
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Although frequently invoked, the no surplusage canon is less absolute
than the “whole statute” canon. One important caveat, previously
discussed, is that words in a statute will be treated as surplus and
disregarded if they were included in error. E.g., Chickasaw Nation v.
United States, 534 U.S. 84, 94 (2001) (emphasis in original): “The
canon requiring a court to give effect to each word ‘if possible’ is
sometimes offset by the canon that permits a court to reject words ‘as
surplusage’ if ‘inadvertently inserted or if repugnant to the rest of
the statute.’” Citing Chickasaw Nation, the Court also observed that
the canon of avoiding surplusage will not be invoked to create
ambiguity in a statute that has a plain meaning if the language in
question is disregarded. Lamie v. United States
Trustee, 540 U.S. 526, 536 (2004).
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When words used in a statute are not specifically defined, they are
generally given their “plain” or ordinary meaning rather than some
obscure usage. E.g., Carcieri v. Salazar, 555 U.S. ___, 129 S. Ct.
1058 (2009); Engine Manufacturers Ass’n v. South Coast Air Quality
Management District, 541 U.S. 246 (2004); BedRoc Limited, LLC v.
United States, 541 U.S. 176 (2004); Asgrow Seed Co. v. Winterboer, 513
U.S. 179, 187 (1995); Federal Deposit Insurance Corp. v. Meyer, 510
U.S. 471, 476 (1994); Mallard v. United States, 490 U.S. 296, 301
(1989); B-261193, Aug. 25, 1995; 70 Comp. Gen. 705 (1991); 38 Comp.
Gen. 812 (1959).
One commonsense way to determine the plain meaning of a word is to
consult a dictionary. E.g., Carcieri, 129 S. Ct. at 1064; Mallard, 490
U.S. at 301; American Mining Congress v. EPA, 824 F.2d 1177, 1183–84 &
n. 7 (D.C. Cir. 1987). Thus, the Comptroller General relied on the
dictionary in B-251189, Apr. 8, 1993, to hold that business suits did
not constitute “uniforms,” which would have permitted the use of
appropriated funds for their purchase. See also B-302973, Oct. 6,
2004; B-261522, Sept. 29, 1995.
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Also, if a word has a specific legal meaning, courts tend to apply
that meaning when interpreting a statute. United States v. Nason, 269
F.3d 10, 16 (1st Cir. 2001) (stating that “we presume, absent evidence
to the contrary, that Congress knew and adopted the widely accepted
legal definition of meanings associated with the specific words
enshrined in the statute,” and referring to Black’s Law Dictionary for
the “most widely accepted legal meaning” of a term). GAO used this
rule of statutory construction to construe a prohibition in a fiscal
year 2010 appropriations act, which prohibited the distribution of
federal funds to “affiliates,” “subsidiaries,” and “allied organizations
” of the Association of Community Organizations for Reform Now
(ACORN). NeighborWorks, a federally chartered entity, asked if one of
its grantees, Affordable Housing Centers of America (AHCOA), fell
within the scope of this provision. As the First Circuit Court of
Appeals did when interpreting federal statutes, GAO used Black’s Law
Dictionary, federal statutes, and federal regulations to find the
plain legal meaning of these terms. B-320329, Sept. 29, 2010.
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Several different canons of construction revolve around these
seemingly straightforward notions. Before discussing some of them, it
is important to note once more that these canons, like most others,
may or may not make sense to apply in particular settings. Indeed, the
basic canon that the same words have the same meaning in a statute is
itself subject to exceptions. In Cleveland Indians Baseball Club, the
Court cautioned: “Although we generally presume that identical words
used in different parts of the same act are intended to have the same
meaning, ... the presumption is not rigid, and the meaning [of the
same words] well may vary with the purposes of the law.” Cleveland
Indians Baseball Club, 532 U.S. at 213 (citations and quotation marks
omitted). To drive the point home, the Court quoted the following
admonition from a law review article:
Id. See also General Dynamics Land Systems, Inc. v. Cline, 540 U.S.
581, 594–96 and fn. 8 (2004) (quoting the same law review passage,
which it notes “has become a staple of our opinions”). Of course, all
bets are off if the statute clearly uses the same word differently in
different places. See Robinson v. Shell Oil Co., 519 U.S. 337, 343
(1997) (“once it is established that the term ‘employees’ includes
former employees in some sections, but not in others, the term
standing alone is necessarily ambiguous”).
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In 2007, the Court applied the exception described in the Cleveland
Indians Baseball Club case in Environmental Defense v. Duke Energy
Corp., 549 U.S. 561 (2007) (upholding differing regulatory definitions
of the same statutory term contained in two sections of the Clean Air
Act). Rejecting the lower court’s holding that there is an “
effectively irrebuttable” presumption that the same defined term in
different provisions of the same statute must be “interpreted
identically,” the Court pointed out simply that “context counts.”
Environmental Defense, 549 U.S. at 575–76.
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Two canons are frequently applied to the use of similar—but not
identical—words in a statute when they are part of the same phrase.
These canons are known as “ejusdem generis,” or “of the same kind,” and
“noscitur a sociis,” loosely meaning that words are known by the
company they keep. See, e.g., B-320329, Sept. 29, 2010 (applying the
principle of ejusdem generis to construe the term “allied organization”
to be in the same class as “affiliates” and “subsidiaries” in an
appropriations act provision).
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language before the first full paragraph:
The Court has cautioned, however, that a canon of construction like
noscitur a sociis cannot modify the meaning of a term that is
specifically defined in a statute. See Schwab v. Reilly, ___ U.S. ___,
130 S. Ct. 2652, 2662 (2010) (“Although we look to dictionaries and
the Bankruptcy Rules to determine the meaning of words the [United
States] Code does not define, ... the Code’s definition of the ‘
property claimed as exempt’ in this case is clear.”).
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Likewise, a statute’s grammatical structure is useful but not
conclusive. Lamie v. United States Trustee, 540 U.S. 526, 534–35
(2004) (the mere fact that a statute is awkwardly worded or even
ungrammatical does not make it ambiguous). Nevertheless, the Court
sometimes gives significant weight to the grammatical structure of a
statute. For example, in Barnhart v. Thomas, 540 U.S. 20, 26 (2003),
the Court rejected the lower court’s construction of a statute in part
because it violated the grammatical “rule of the last antecedent.”
Also, in Arcadia, Ohio v. Ohio Power Co., 498 U.S. 73 (1991), the
Court devoted considerable attention to the placement of the word “or”
in a series of clauses. It questioned the interpretation proffered by
one of the parties that would have given the language an awkward
effect, noting: “In casual conversation, perhaps, such absentminded
duplication and omission are possible, but Congress is not presumed to
draft its laws that way.” Arcadia, 498 U.S. at 79. By contrast, in
Nobelman v. American Savings Bank, 508 U.S. 324, 330 (1993), the Court
rejected an interpretation, noting: “We acknowledge that this reading
of the clause is quite sensible as a matter of grammar. But it is not
compelled.”
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paragraph:
The heading of a particular section of a statute may also be relevant.
See, e.g., B-321823, Dec. 6, 2011, at 4 (the heading of a particular
statutory provision among the factors considered in construing that
provision).
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The same considerations apply to a statute’s popular name and to the
headings, or titles, of particular sections of the statute. See Intel
Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 242 (2004) (“A
statute’s caption ... cannot undo or limit its text’s plain meaning”).
See also Immigration & Naturalization Service v. St. Cyr, 533 U.S. 289,
308–09 (2001); Pennsylvania Department of Corrections v. Yeskey,
524 U.S. 206, 212 (1998). In St. Cyr, the Supreme Court concluded that
a section entitled “Elimination of Custody Review by Habeas Corpus”
did not, in fact, eliminate habeas corpus jurisdiction. It found that
the substantive terms of the section were less definitive than the
title. See also McConnell v. Federal Election Commission, 540 U.S. 93,
180 (2003).
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Preambles. Federal statutes often include an introductory “preamble”
or “purpose” section before the substantive provisions in which
Congress sets forth findings, purposes, or policies that prompted it
to adopt the legislation. Such preambles have no legally binding
effect. However, they may provide indications of congressional intent
underlying the law. Sutherland states with respect to preambles:
2A Sutherland, § 47:04 at 221–22.80 For an example in which the Court
used statutory findings to inform its interpretation of congressional
intent, see General Dynamics Land Systems, Inc. v. Cline, 540 U.S.
581, 589–91 (2004).
6. Legislative History:
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[81] The majority opinion in Association of American Physicians &
Surgeons placed heavy reliance on Public Citizen, noting that “[t]he
Court adopted, we think it is fair to say, an extremely strained
construction of the word ‘utilized’ in order to avoid the
constitutional question.” Association of American Physicians &
Surgeons, 997 F.2d at 906. Both Public Citizen and Association of
American Physicians & Surgeons drew strongly worded concurring
opinions along the same lines. The concurring opinions maintained that
FACA clearly applied by its plain terms to the respective groups, but
that its application was unconstitutional as so applied. The District
of Columbia Circuit Court of Appeals clarified its holding in American
Physicians & Surgeons in 2005. In re Cheney, 406 F.3d 723 (D.C. Cir.
2005). There, in order to avoid “severe separation-of-powers problems”
in applying FACA on the basis that private parties were involved with
a committee in the Executive Office of the President, the court held
that for purposes of FACA “a committee is composed wholly of federal
officials if the President has given no one other than a federal
official a vote in or, if the committee acts by consensus, a veto over
the committee’s decisions.” Id. at 728.
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The use becomes improper when the line is crossed from using
legislative history to resolve things that are not clear in the
statutory language to using it to rewrite the statute. E.g., Shannon
v. United States, 512 U.S. 573, 583 (1994) (declining to give effect
to “a single passage of legislative history that is no way anchored in
the text of the statute”); Ratzlaf v. United States, 510 U.S. 135, 147–
48 (1994) (declining to “resort to legislative history to cloud a
statutory text that is clear”); Brill v. Countrywide Home Loans, Inc.,
427 F.3d 446, 448 (7th Cir. 2005) (noting that “when the legislative
history stands by itself, as a naked expression of ‘intent’
unconnected to any enacted text, it has no more force than an opinion
poll of legislators—less, really, as it speaks for fewer”). The
Comptroller General put it this way, “as a general proposition, there
is a distinction to be made between utilizing legislative history for
the purpose of illuminating the intent underlying language used in a
statute and resorting to that history for the purpose of writing into
the law that which is not there.” 55 Comp. Gen. 307, 325 (1975).
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(including the quoted language):
Legislative history versus incorporation by reference
At this point in the discussion a distinction should be made between
legislative sources being consulted in the manner described previously
and an outside source to which a statutory provision expressly refers.
Incorporation by reference is the use of legislative language to make
extra-statutory material part of the legislation by indicating that
the extra-statutory material should be treated as if it were written
out in full in the legislation. See generally Black’s Law Dictionary
781 (8th ed. 2004). For example, in a 2001 decision, the United States
District Court for the District of Columbia upheld the incorporation
by reference of an unenacted bill into an appropriations law. Hershey
Foods Corp. v. United States Department of Agriculture, 158 F. Supp.
2d 37 (D.D.C. 2001), aff’d, 293 F.3d 520 (D.C. Cir. 2002). In that
case, the Consolidated Appropriations Act for fiscal year 2000
provided that “H.R. 3428 of the 106th Congress, as introduced on
November 17, 1999” is “hereby enacted into law.” Id. at 38. The
unenacted bill that was incorporated into the appropriations law had
been published in the Congressional Record. The court said that “
Congress may incorporate by cross-reference in its bills if it chooses
to legislate in that manner.” Id. at 41.
Incorporation by reference is a well-accepted legislative tool. Id. (“
Laws containing cross-references do not appear to be uncommon.”).
Indeed, there are numerous instances in which the Supreme Court, for
more than 100 years, has accepted incorporation by reference without
objection. See, e.g., Tennessee v. Lane, 541 U.S. 509, 517 (2004);
United States v. Sharpnack, 355 U.S. 286, 293 (1958); In re Heath, 144
U.S. 92, 94 (1892). In all of these cases, the language of the
statutes evidenced clear congressional intent to incorporate by
reference, and the referenced material was specifically ascertainable
from the legislative language so all would know with certainty the
duties, terms, conditions, and constraints enacted into law.
In a 2008 decision, GAO considered the legal effect of seven
appropriations provisions in the Consolidated Appropriations Act,
2008, Pub. L. No. 110-161, 121 Stat. 1844 (Dec. 26, 2007), which
incorporated by reference specified passages of an explanatory
statement of the House Committee on Appropriations that was printed in
the Congressional Record on December 17, 2007. B-316010, Feb. 25,
2008. This explanatory statement contained more specific allocations
for the agencies affected. After reviewing the language of the seven
provisions, GAO determined that:
Id. at 8. GAO thus concluded that the affected agencies were required
to obligate and expend amounts appropriated in the seven provisions in
accordance with the referenced allocations in the explanatory
statement. See also B-319009, Apr. 27, 2010 (incorporation by
reference for purposes of reprogramming requirement).
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However, material in committee reports, even a conference report, will
ordinarily not be used to controvert clear statutory language.
Squillacote, 739 F.2d at 1218; Hart v. United States, 585 F.2d 1025
(Ct. Cl. 1978); B-278121, Nov. 7, 1997; B-33911, B-62187, July 15,
1948. Also, it will not be used to add requirements that Congress did
not include in the statute itself. For example, where Congress
appropriates lump sum amounts without statutorily restricting the use
of those funds, “a clear inference arises that it does not intend to
impose legally binding restrictions, and indicia in committee reports
and other legislative history as to how the funds should or are
expected to be spent do not establish any legal requirements” on the
agency. 55 Comp. Gen. 307, 319 (1975); see also Hein v. Freedom From
Religion Foundation, Inc., 551 U.S. 587, 608 n.7 (2007); Lincoln v.
Vigil, 508 U.S. 182, 192 (1993). Also, such material is not entitled
to any weight as legislative history if the statement in the report is
different from or unrelated to any language in the act itself. Abrego
Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir. 2006); Brill v.
Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005); B-320091,
July 23, 2010, at n.4.
An interesting example of the weight accorded report language which
alters the plain meaning and effect of the statutory language is in
Arlington Central School District Board of Education v. Murphy, 548
U.S. 291 (2006). In this case the issue was whether a provision of the
Individuals with Disabilities Education Act (IDEA) authorizing the
award of attorney fees and costs to parents who prevailed in lawsuits
under the act extended to costs incurred for experts. The Court
approached the issue by noting that the conditions Congress attaches
to the receipt of federal funds by states are contractual in nature
and must therefore be expressed “unambiguously” in order to give
states adequate notice of what they are accepting. Arlington Central,
548 U.S. at 296. It went on to hold that the IDEA statute did not
clearly indicate that expert fees were covered by its fee-shifting
provision. On the contrary, the Court concluded that the language of
the fee-shifting provision and other IDEA provisions strongly
suggested that expert fees were not covered. The Court was influenced
by the judicial rule that the term “costs” in fee-shifting provisions
is a term of art that generally does not include expert fees. Id. The
most striking aspect of the Court’s opinion was its rejection of
legislative history from the conference report that explicitly stated
the intent to include expert costs in IDEA’s fee-shifting provision.
The conference report, quoted in the opinion, could not have been
clearer: “The conferees intend that the term ‘attorneys’ fees as part
of the ‘costs’ include reasonable expenses and fees of expert
witnesses and the reasonable costs of any test or evaluation which is
found to be necessary for the preparation of the ... case.” Id. at
304. Nevertheless, the Court concluded:
“Whatever weight this legislative history would merit in another
context, it is not sufficient here. Putting the legislative history
aside, we see virtually no support for respondents’ position. Under
these circumstances, where everything other than the legislative
history overwhelmingly suggests that expert fees may not be recovered,
the legislative history is simply not enough.”
Id. Thus, the conference report statement could not make up for the
absence of any statutory language making expert fees reimbursable. Cf.
B-307767, Nov. 13, 2006 (floor statement is not entitled to weight as
legislative history when the statute is clear on its face since the
statement provides an individual member’s views and does not
necessarily represent the meaning and purpose of the lawmaking body
collectively).
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Statements by the sponsor of a bill are also entitled to somewhat more
weight. E.g., Schwegmann Brothers v. Calvert Distillers Corp., 341
U.S. 384, 394–95 (1951); Ex Parte Kawato, 317 U.S. 69, 77 (1942).
However, they are not controlling. General Dynamics Land Systems, Inc.
v. Cline, 540 U.S. 581, 597–99 (2004); Chrysler Corp. v. Brown, 441
U.S. 281, 311 (1979).
Page 2-104 – Replace the last paragraph with the following:
GAO naturally follows the principle that post-enactment statements do
not constitute legislative history. E.g., 72 Comp. Gen. 317 (1993); 54
Comp. Gen. 819, 822 (1975). Likewise, the Office of Legal Counsel has
virtually conceded that presidential signing statements fall within
the realm of post-enactment statements that carry no weight as
legislative history. See 17 Op. Off. Legal Counsel 131 (1993).85 In
2007, GAO examined how the federal courts have treated signing
statements in their published decisions. A search of all federal case
law since 1945 found fewer than 140 cases that cited presidential
signing statements, most commonly to supplement legislative history
such as committee reports. Courts also have cited signing statements
to establish the date of signing, provide a short summary of the
statute, explain the purpose of the statute, or describe the
underlying policy behind the statute. GAO concluded that, overall,
federal courts infrequently cite or refer to signing statements in
their published opinions. B-308603, June 18, 2007, Enclosure IV. See
also B-309928, Dec. 20, 2007, for additional discussion on signing
statements.
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[85] While this opinion stopped short of attempting “finally to decide”
the matter, it presented several powerful arguments against the
validity of signing statements as legislative history but no arguments
in favor of their use for this purpose. On June 27, 2006, the Senate
Judiciary Committee held a hearing on the subject of presidential
signing statements. Background on the hearing, including witness
statements, can be found at [hyperlink,
http://judiciary.senate.gov/hearings/hearing.cfm?id=1969] (last
visited Dec. 30, 2010).
Page 2-105 – Add the following to the third full paragraph:
* Doe v. Chao, 540 U.S. 614, 621–23 (2004): Congress deleted from the
bill language that would have provided for the type of damage award
sought by the petitioner.
See also F. Hoffman-La Roche Ltd v. Empagran S.A., 542 U.S. 155
(2004); Resolution Trust Corp. v. Gallagher, 10 F.3d 416 423 (7th Cir.
1993); Davis v. United States, 46 Fed. Cl. 421 (2000).
7. Presumptions and “Clear Statement” Rules:
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The Court reaffirmed the presumption against retroactivity of statutes
in several recent decisions. E.g., AT&T Corp. v. Hulteen, ___ U.S. ___,
129 S. Ct. 1962 (2009); Immigration & Naturalization Service v. St.
Cyr, 533 U.S. 289 (2001); Martin v. Hadix, 527 U.S. 343 (1999); Lindh
v. Murphy, 521 U.S. 320 (1997); Landgraf v. USI Film Products, 511
U.S. 244 (1994). In Landgraf, the Court elaborated on the policies
supporting the presumption against retroactivity:
“Because it accords with widely held intuitions about how statutes
ordinarily operate, a presumption against retroactivity will generally
coincide with legislative and public expectations. Requiring clear
intent assures that Congress itself has affirmatively considered the
potential unfairness of retroactive application and determined that it
is an acceptable price to pay for the countervailing benefits. Such a
requirement allocates to Congress responsibility for fundamental
policy judgments concerning the proper temporal reach of statutes, and
has the additional virtue of giving legislators a predictable
background rule against which to legislate.”
Landgraf, 511 U.S. at 272–73.
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There is a strong presumption against waiver of the federal
government’s immunity from suit. The courts have repeatedly held that
waivers of sovereign immunity must be “unequivocally expressed.” E.g.,
United States v. Nordic Village, Inc., 503 U.S. 30 (1992); Marathon
Oil Co. v. United States, 374 F.3d 1123, 1127 (Fed. Cir. 2004), cert.
denied, 544 U.S. 1031 (2005); Shoshone Indian Tribe of the Wind River
Reservation, Wyoming v. United States, 51 Fed. Cl. 60 (2001), aff’d,
364 F.3d 1339 (Fed. Cir. 2004), cert. denied, 544 U.S. 973 (2005).
Legislative history does not help for this purpose. The relevant
statutory language in Nordic Village was ambiguous and could have been
read, evidently with the support of the legislative history, to impose
monetary liability on the United States. The Court rejected such a
reading, applying instead the same approach as described above in its
federalism jurisprudence:
“Legislative history has no bearing on the ambiguity point. As in the
Eleventh Amendment context, see Hoffman, supra, ... the ‘unequivocal
expression’ of elimination of sovereign immunity that we insist upon
is an expression in statutory text. If clarity does not exist there,
it cannot be supplied by a committee report.”
Nordic Village, 503 U.S. at 37.
[End of section]
Chapter 3: Agency Regulations and Administrative Discretion:
A. Agency Regulations:
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As a conceptual starting point, agency regulations fall into three
broad categories. First, every agency head has the authority, largely
inherent but also authorized generally by 5 U.S.C. § 301,1 to issue
regulations to govern the internal affairs of the agency. Regulations
in this category may include such subjects as conflicts of interest,
employee travel, and delegations to organizational components. This
statute is nothing more than a grant of authority for what are called
“housekeeping” regulations. Chrysler Corp. v. Brown, 441 U.S. 281, 309
(1979); Smith v. Cromer, 159 F.3d 875, 878 (4th Cir. 1998), cert.
denied, 528 U.S. 826 (1999); NLRB v. Capitol Fish Co., 294 F.2d 868,
875 (5th Cir. 1961). It confers “administrative power only.” United
States v. George, 228 U.S. 14, 20 (1913); B-302582, Sept. 30, 2004; 54
Comp. Gen. 624, 626 (1975). Thus, the statute merely grants agencies
authority to issue regulations that govern their own internal affairs;
it does not authorize rulemaking that creates substantive legal
rights. Schism v. United States, 316 F.3d 1259, 1278–84 (Fed. Cir.
2002), cert. denied, 539 U.S. 910 (2003).
1. The Administrative Procedure Act:
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from page 3-5 with the following paragraph:
Richard J. Pierce, Jr., Administrative Law Treatise, § 7.4 at 442 (4th
ed. 2000) (citations omitted). Two decisions make clear that the
courts will insist upon at least some ascertainable and coherent
rationale: Northeast Maryland Waste Disposal Authority v. EPA, 358
F.3d 936, 948 (D.C. Cir. 2004) (the court remanded a rule to the
agency because it was “frankly, stunned to find” that the agency had
provided “not one word in the proposed or final rule” (emphasis in
original) to explain a key aspect of its rule), and International
Union, United Mine Workers of America v. Department of Labor, 358 F.3d
40, 45 (D.C. Cir. 2004) (finding that the agency’s stated rationale to
withdraw a proposed rule was disjointed and conclusory, the court
returned the matter to the agency “so that it may either proceed with
the ... rulemaking or give a reasoned account of its decision not to
do so”).
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As a starting point, anything that falls within the definition of a
“rule” in 5 U.S.C. § 551(4) and for which formal rulemaking is not
required, is subject to the informal rulemaking procedures of 5 U.S.C.
§ 553 unless exempt. This statement is not as encompassing as it may
seem, since section 553 itself provides several very significant
exemptions. These exemptions, according to a line of decisions by the
U.S. Court of Appeals for the District of Columbia Circuit, will be
“narrowly construed and only reluctantly countenanced.” Jifry v.
Federal Aviation Administration, 370 F.3d 1174, 1179 (D.C. Cir. 2004),
cert. denied, 543 U.S. 1146 (2005); Utility Solid Waste Activities
Group v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001); Asiana Airlines v.
Federal Aviation Administration, 134 F.3d 393, 396–97 (D.C. Cir.
1998); Tennessee Gas Pipeline Co. v. Federal Energy Regulatory
Commission, 969 F.2d 1141, 1144 (D.C. Cir. 1992); New Jersey
Department of Environmental Protection v. EPA, 626 F.2d 1038, 1045
(D.C. Cir. 1980).8 Be that as it may, they appear in the statute and
cannot be disregarded. For example, section 553 does not apply to
matters “relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts.” 5 U.S.C. § 553(a)(2).
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[8] In Utility Solid Waste Activities Group, 236 F.3d at
754–55, the court held that the “good cause” exemption in section
553(b) does not allow an agency to forego notice and comment when
correcting a technical error in a regulation. Likewise, the court held
that agencies have no “inherent power” to correct such technical
errors outside of the APA procedures. Utility Solid Waste Activities
Group, 236 F.3d at 752–54. The decision in Jifry provides an example
of a case upholding an agency’s use of the good cause exemption based
on emergency conditions involving potential security threats. Jifry,
370 F.3d at 1179.
4. Waiver of Regulations:
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Sometimes legislative regulations or the statutes they implement do
explicitly authorize “waivers” in certain circumstances. Here, of
course, the waiver authority is an integral part of the underlying
statutory or regulatory scheme. Accordingly, courts give effect to
such waiver provisions and, indeed, they may even hold that an agency’
s failure to consider or permit waiver is an abuse of discretion.
However, the courts usually accord considerable deference to agency
decisions on whether or not to grant discretionary waivers. For
illustrative cases, see BDPCS, Inc. v. FCC, 351 F.3d 1177 (D.C. Cir.
2003); People of the State of New York & Public Service Commission of
the State of New York v. FCC, 267 F.3d 91 (2nd Cir. 2001); BellSouth
Corporation v. FCC, 162 F.3d 1215 (D.C. Cir. 1999); Rauenhorst v.
United States Department of Transportation, 95 F.3d 715 (8th Cir.
1996).
B. Agency Administrative Interpretations:
1.Interpretation of Statutes:
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insert a reference to new footnote number 28a as follows:
The interpretation of a statute, by regulation or otherwise, by the
agency Congress has charged with the responsibility for administering
it, is entitled to considerable weight. This principle is really a
matter of common sense. An agency that works with a program from day
to day develops an expertise that should not be lightly disregarded.
[Footnote 28a] Even when dealing with a new law, Congress does not
entrust administration to a particular agency without reason, and this
decision merits respect. This, in addition to fundamental fairness, is
why GAO considers it important to obtain agency comments wherever
possible before rendering a decision.[Footnote 29]
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[28a] For example, the IG of the Denali Commission asked the
Comptroller General to define the scope of the services performed by
nonfederal commissioners. B-322832, Mar. 30, 2012. The Denali
Commission Act provides that nonfederal commissioners must “develop
and propose an annual work plan for providing federal financial
assistance in Alaska.” GAO said that the Secretary of Commerce, who
appoints commissioners, and the Federal Co-chair of the Denali
Commission are in the best position to determine what activities are
“necessary and incident” to this duty. Thus, we deferred to the
Secretary and Federal Co-chair on this question.
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In what is now recognized as one of the key cases in determining how
much “deference” is due an agency interpretation, Chevron, Inc. v.
Natural Resources Defense Council, 467 U.S. 837 (1984), the Court
formulated its approach to deference in terms of two questions. The
first question is “whether Congress has directly spoken to the precise
question at issue.” Chevron, 467 U.S. at 842. If it has, the agency
must of course comply with clear congressional intent, and regulations
to the contrary will be invalidated. Thus, before you ever get to
questions of deference, it must first be determined that the
regulation is not contrary to the statute, a question of delegated
authority rather than deference. “If a court, employing traditional
tools of statutory construction, ascertains that Congress had an
intention on the precise question at issue, that intention is the law
and must be given effect.” Id. at 843 n.9. An example is General
Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581 (2004), in which
the Court declined to give Chevron deference, or any lesser degree of
deference, to an agency interpretation that it found to be “clearly
wrong” as a matter of statutory construction, since the agency
interpretation was contrary to the act’s text, structure, purpose,
history, and relationship to other federal statutes.
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[29] GAO’s desire for agency comments applies to audit reports as well
as legal decisions. However, in view of the fundamental differences
between the two products, the process differs. For GAO’s policy for
audit reports, see GAO’s Agency Protocols, GAO-03-232SP (Washington,
D.C.: Dec. 2, 2002). For a legal decision, GAO’s typical practice is
to solicit the agency’s position on the legal issue(s) involved before
a draft is ever written. A “development letter” is used to document
facts, refine legal issues, and obtain the agency’s perspective on the
law and its implementation. Accordingly, draft legal decisions are not
submitted for comment. See GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006),
available at [hyperlink, www.gao.gov/legal/resources.html].
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insert new footnote number 30a as follows:
When the agency’s interpretation is in the form of a regulation with
the force and effect of law, the deference, as we have seen, is at its
highest.[Footnote 30]
The agency’s position is entitled to Chevron deference and should be
upheld unless it is arbitrary or capricious. There should be no
question of substitution of judgment.30a If the agency position can be
said to be reasonable or to have a rational basis within the statutory
grant of authority, it should stand, even though the reviewing body
finds some other position preferable. See, e.g., Household Credit
Services, Inc. v. Pfennig, 541 U.S. 232 (2004); Barnhart v. Thomas,
540 U.S. 20 (2003); Yellow Transportation, Inc. v. Michigan, 537 U.S.
36 (2002); Shalala v. Illinois Council on Long Term Care, Inc., 529
U.S. 1, 20–21 (2000); American Telephone & Telegraph Corp. v. Iowa
Utility Board, 525 U.S. 366 (1999). Chevron deference is also given to
authoritative agency positions in formal adjudication. See Immigration
& Naturalization Service v. Aguirre-Aguirre, 526 U.S. 415 (1999)
(holding that a Bureau of Indian Affairs statutory interpretation
developed in case-by-case formal adjudication should be accorded
Chevron deference). For an extensive list of Supreme Court cases
giving Chevron deference to agency statutory interpretations found in
rulemaking or formal adjudication, see United States v. Mead Corp.,
533 U.S. 218, 231 at n.12 (2001).
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[30a\ This is true even if the statute in question has been construed
previously by a court, unless the court interpreted the statute
according to “the unambiguous terms of the statute[, leaving] no room
for agency discretion.” National Cable & Telecommunications Ass’n v.
Brand X Internet Services, 545 U.S. 967 (2005). This result stems from
the policy underlying Chevron deference, that is, the presumption that
Congress, when it leaves ambiguity in a statute, means for the agency
to resolve the ambiguity, exercising whatever degree of discretion the
ambiguity allows. “[I]t is for agencies, not courts, to fill statutory
gaps.” Id.
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* Evidence (or lack thereof) of congressional awareness of, and
acquiescence in, the administrative position. United States v.
American Trucking Ass’n, 310 U.S. 534, 549–50 (1940); Helvering v.
Winmill, 305 U.S. 79, 82–83 (1938); Norwegian Nitrogen Products Co.
v. United States, 288 U.S. 294, 313–15 (1933); Collins v. United
States, 946 F.2d 864 (Fed. Cir. 1991); Davis v. Director, Office of
Workers’ Compensation Programs, Department of Labor, 936 F.2d 1111,
1115–16 (10th Cir. 1991); 41 Op. Att’y Gen. 57 (1950); B-114829-O.M.,
July 17, 1974. Interestingly, in Coke v. Long Island Care At Home,
Ltd., 376 F.3d 118 (2nd Cir. 2004), the court acknowledged the
potential relevance of congressional acquiescence to a 30-year-old
regulation, noting that Congress had amended the applicable statute
seven times over the life of the regulation without expressing any
disapproval of it. However, the court ultimately rejected the
congressional acquiescence argument—according to the court,
“affectionately known as the ‘dog didn’t bark canon’”—and held the
regulation invalid. Coke, 376 F.3d at 130 and n.5.
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More recent decisions further indicate that Chevron deference may
extend beyond legislative rules and formal adjudications. Most
notably, the Supreme Court observed in dicta in Barnhart v. Walton,
535 U.S. at 222, that Mead Corp. “denied [any] suggestion” in
Christensen that Chevron deference was limited to interpretations
adopted through formal rulemaking. The Barnhart opinion went on to say
that:
“In this case, the interstitial nature of the legal question, the
related expertise of the Agency, the importance of the question to the
administration of the statute, the complexity of that administration,
and the careful consideration the Agency has given the question over a
long period of time all indicate that Chevron provides the appropriate
legal lens through which to view the legality of the Agency
interpretation here at issue.”
Barnhart, 535 U.S. at 222.33 See also General Dynamics Land Systems,
Inc. v. Cline, 540 U.S. 581 (2004); Edelman v. Lynchburg College, 535
U.S. 106, 114 (2002). Two additional decisions are instructive in
terms of the limits of Chevron. In both cases the Court found that the
issuances containing agency statutory interpretations were entitled to
some weight, but not Chevron deference. Raymond B. Yates, M.D., P.C.,
Profit Sharing Plan v. Hendon, 541 U.S. 1 (agency advisory opinion);
Alaska Department of Environmental Conservation v. EPA, 540 U.S. 461
(2004) (internal agency guidance memoranda).
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Circuit court decisions have added to the confusion. See Coke, 376
F.3d 118 (the court found that a regulation was not entitled to
Chevron deference, despite congressional acquiescence and even though
the statute was ambiguous and the regulation was issued through notice
and comment rulemaking, because evidence showed the agency intended
the regulation to be only an “interpretive” as opposed to a
“legislative” rule); Doe v. United States, 372 F.3d 1347, 1357–59
(Fed. Cir. 2004), cert. denied, 544 U.S. 904 (2005) (court applied
Chevron deference to an Office of Personnel Management regulation
issued under general rulemaking authority); James v. Von Zemenszky,
301 F.3d 1364 (Fed. Cir. 2002) (ignoring Barnhart factors because the
agency statutory interpretation contained in a directive and handbook
“fell within the class of informal agency interpretations that do not
ordinarily merit Chevron deference”); Federal Election Commission v.
National Rifle Ass’n, 254 F.3d 173 (D.C. Cir. 2001) (holding that
Federal Election Committee (FEC) advisory opinions are entitled to
Chevron deference); Matz v. Household International Tax Reduction
Investment Plan, 265 F.3d 572 (7th Cir. 2001), cert. denied, 535 U.S.
954 (2002) (holding that an Internal Revenue Service (IRS) statutory
interpretation in an amicus brief, supported by an IRS Revenue Ruling
and agency manual, was not entitled to Chevron deference); Klinedinst
v. Swift Investments, Inc., 260 F.3d 1251 (11th Cir. 2001) (holding
that a Department of Labor handbook was not due Chevron deference);
TeamBank v. McClure, 279 F.3d 614 (8th Cir. 2002) (holding that Office
of the Controller of the Currency informal adjudications are due
Chevron deference); In re Sealed Case, 223 F.3d 775 (D.C. Cir. 2000)
(holding that FEC’s probable cause determinations are entitled to
Chevron deference). As Professor Pierce notes:
“After Mead, it is possible to know only that legislative rules and
formal adjudications are always entitled to Chevron deference, while
less formal pronouncements like interpretative rules and informal
adjudications may or may not be entitled to Chevron deference. The
deference due a less formal pronouncement seems to depend on the results
of judicial application of an apparently open-ended list of factors
that arguably qualify as ‘other indication[s] of a comparable
congressional intent’ to give a particular type of agency
pronouncement the force of law.”[Footnote 34]
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the page:
* B-322481, Aug. 2, 2012 (finding no basis to question the Secretary
of Transportation’s determination that a transportation project was
not eligible for further funding, as Congress gave the Secretary
statutory authority to determine whether projects were sufficiently
funded, and the Secretary had reasonably applied this statutory
discretion).
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The deference principle does not apply to an agency’s interpretation
of a statute that is not part of its program or enabling legislation
or is a statute of general applicability. See Adams v. SEC, 287 F.3d
183 (D.C. Cir. 2002); Association of Civilian Technicians v. Federal
Labor Relations Authority, 200 F.3d 590 (9th Cir. 2000); Contractor’s
Sand & Gravel v. Federal Mine Safety & Health Commission, 199 F.3d
1335 (D.C. Cir. 2000). In “split-jurisdiction” situations, where
multiple agencies share specific statutory responsibility, courts have
determined that Chevron deference is due to the primary executive
branch enforcer and the agency accountable for overall administration
of the statutory scheme. See Martin v. Occupational Safety and Health
Review Commission, 499 U.S. 144 (1991); Collins v. National
Transportation Safety Board, 351 F.3d 1246 (D.C. Cir. 2003).
2. Interpretation of Agency’s Own Regulations:
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top of the page:
Recent cases according Seminole Rock deference to agency
interpretations of their regulations include: Entergy Services, Inc.
v. Federal Energy Regulatory Commission, 375 F.3d 1204, 1209 (D.C.
Cir. 2004); Castlewood Products, L.L.C. v. Norton, 365 F.3d 1076, 1079
(D.C. Cir. 2004); In re Sullivan, 362 F.3d 1324, 1328 (Fed. Cir.
2004). In WHX Corp. v. SEC, 362 F.3d 854, 860 (D.C. Cir. 2004), the
court did not defer to an agency interpretation because the
interpretation rested entirely on staff advice and there was no formal
agency precedent or official interpretative guideline on point.
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Recently the Court held than an agency’s interpretation of its own
regulation is entitled to Auer deference only when the regulation
interpreted is itself a product of the agency’s expertise and
authority in a given area. In Gonzales v. Oregon, 546 U.S. 243 (2006),
the Court examined an interpretive rule issued by the Attorney
General, which stated that assisting suicide was not a “legitimate
medical purpose” for which doctors could prescribe drugs, and doctors
doing so would violate the Controlled Substance Act (CSA). Gonzales,
546 U.S. at 254. The Attorney General argued that the rule was
entitled to Auer deference because it interpreted the term “legitimate
medical purpose” as that term was used in a 1971 regulation issued by
the Attorney General under the CSA.
However, the Court found Auer deference unwarranted, because rather
than reflecting the Attorney General’s deliberation and imprimatur,
the 1971 regulation merely mimicked the language of the CSA. The Court
stated:
“In Auer, the underlying regulations gave specificity to a statutory
scheme ... and reflected the considerable experience and expertise the
Department of Labor had acquired over time with respect to the
complexities of the [statutory scheme]. Here, on the other hand, the
underlying regulation does little more than restate the terms of the
statute itself. The language the Interpretive Rule addresses comes
from Congress, not the Attorney General, and the near-equivalence of
the statute and regulation belies the Government’s argument for Auer
deference.”
Gonzales, 546 U.S. at 256–57.
In contrast to some of the more muddled deference cases discussed
previously, Gonzales draws a bright line when it comes to an agency’s
interpretation of its own regulation. “An agency does not acquire
special authority to interpret its own words when, instead of using
its expertise and experience to formulate a regulation, it has elected
merely to paraphrase the statutory language.” Id. at 257.
C. Administrative Discretion:
1. Introduction:
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Under the Administrative Procedure Act (APA), action that is “
committed to agency discretion by law” is not subject to judicial
review. 5 U.S.C. § 701(a)(2). As the Supreme Court has pointed out,
this is a “very narrow exception” applicable in “rare instances”
where, quoting from the APA’s legislative history, “statutes are drawn
in such broad terms that in a given case there is no law to apply.”
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410
(1971). As noted, the “no law to apply” exception is uncommon, and
most exercises of discretion will be found reviewable at least to some
extent.37 See Raymond Proffitt Foundation v. Corps of Engineers, 343
F.3d 199, 207 (3rd Cir. 2003); City of Los Angeles v. Department of
Commerce, 307 F.3d 859 (9th Cir. 2002); Drake v. Federal Aviation
Administration, 291 F.3d 59 (D.C. Cir. 2002), cert. denied, 537 U.S.
1193 (2003); Fox Television Stations, Inc. v. FCC, 280 F.3d 1027 (D.C.
Cir. 2002); Diebold v. United States, 947 F.2d 787 (6th Cir. 1991).
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[37] However, agency inaction in declining to initiate enforcement or
other regulatory action is subject to “a presumption of
unreviewability," although that presumption is rebuttable. Heckler v.
Chaney, 470 U.S. 821 (1985). Another obvious exception is if a statute
explicitly precludes judicial review. See Jordan Hospital, Inc. v.
Shalala, 276 F.3d 72 (1st Cir. 2002), cert. denied, 537 U.S. 812
(2002); National Coalition to Save Our Mall v. Norton, 269 F.3d 1092
(D.C. Cir. 2001), cert. denied, 537 U.S. 813 (2002) (construction of
World War II memorial); Ismailov v. Reno, 263 F.3d 851 (8th Cir. 2001)
(refusal to extend deadline for asylum application). See also Ohio
Public Interest Research Group, Inc. v. Whitman, 386 F.3d 792 (6th
Cir. 2004); Godwin v. Secretary of Housing and Urban Development, 356
F.3d 310 (D.C. Cir. 2004).
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bulleted paragraph:
Even where the APA does not flatly preclude judicial review, the
courts will entertain a lawsuit under the Act only if it involves an “
agency action” that is subject to redress under the Act. In Norton
v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004), the Court
rejected a suit under the APA to compel the Interior Department to
regulate the use of off-road vehicles on certain federal wilderness
lands. The Court concluded that there was no legal mandate requiring
the agency to take such action. The Court described the jurisdictional
parameters of the APA as follows:
“The APA authorizes suit by ‘a person suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action
within the meaning of a relevant statute.’ 5 U.S.C. § 702. Where no
other statute provides a private right of action, the ‘agency action’
complained of must be ‘final agency action.’ § 704 (emphasis added).
‘Agency action’ is defined in § 551(13) to include ‘the whole or a
part of an agency rule, order, license, sanction, relief, or the
equivalent or denial thereof, or failure to act.’ (Emphasis added.)
The APA provides relief for a failure to act in § 706(1): ‘The
reviewing court shall ... compel agency action unlawfully withheld or
unreasonably delayed.’ “Sections 702, 704, and 706(1) all insist upon an
‘agency action,’ either as the action complained of (in §§ 702 and
704) or as the action to be compelled (in § 706(1)).”
Norton, 542 U.S. at 61–62. Thus, the Court held that in order to be
viable, an APA claim seeking to compel an agency to act must point to “
a discrete agency action that it is required to take.” Id. at 64
(emphasis in original). This standard precludes “broad programmatic
attacks.” Id. The Court added:
“The principal purpose of the APA limitations we have discussed-—and
of the traditional limitations upon mandamus from which they were
derived—-is to protect agencies from undue judicial interference with
their lawful discretion, and to avoid judicial entanglement in
abstract policy disagreements which courts lack both expertise and
information to resolve.”
Id.
2. Discretion Is Not Unlimited:
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In Lincoln v. Vigil, 508 U.S. 182 (1993), the Supreme Court concluded
that, absent statutory elaboration, decisions about how to allocate
funds within a lump-sum appropriation are committed to agency
discretion by law. The Court noted that “the very point of a lump-sum
appropriation is to give an agency the capacity to adapt to changing
circumstances and meet its statutory responsibilities in what it sees
as the most effective or desirable way.” Lincoln, 508 U.S. at 191.
Therefore, the Court held that judicial review of the agency’s
decision to discontinue a program that had been previously funded
through a lump-sum appropriation was precluded. (See Chapter 6 for a
more detailed discussion of the availability of appropriations.) See
also Hein v. Freedom From Religion Foundation, Inc., 551 U.S. 587
(2007); 55 Comp. Gen. 307 (1975); B-278121, Nov. 7, 1997.
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Discretion must be exercised before the obligation is incurred.
Approval after the fact is merely a condoning of what has already been
done and does not constitute the exercise of discretion. 22 Comp. Gen.
1083 (1943); 14 Comp. Gen. 698 (1935); A-57964, Jan. 30, 1935. (This
point should not be confused with an agency’s occasional ability to
ratify an otherwise unauthorized act. See, e.g., B-306353, Oct. 26,
2005.)
4. Regulations May Limit Discretion:
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For additional authority on the proposition that an agency can, by
regulation, restrict otherwise discretionary action, see United States
v. Nixon, 418 U.S. 683 (1974); Vitarelli v. Seaton, 359 U.S. 535
(1959); Service v. Dulles, 354 U.S. 363 (1957); United States v.
Morgan, 193 F.3d 252 (4th Cir. 1999); Clarry v. United States, 85
F.3d 1041 (2nd Cir. 1996); Waldron v. Immigration & Naturalization
Service, 17 F.3d 511, 519 (2nd Cir. 1994); Montilla v. Immigration
& Naturalization Service, 926 F.2d 162 (2nd Cir. 1991). See also B-
316381, July 18, 2008; 67 Comp. Gen. 471 (1988).
[End of section]
Chapter 4: Availability of Appropriations: Purpose:
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11. Lobbying, Publicity or Propaganda, and Related Matters:
a. Introduction:
b. Penal Statutes:
c. Appropriation Act Restrictions:
(1) Origin and general considerations:
(2) Self-aggrandizement:
(3) Covert propaganda:
(4) Purely partisan materials:
(5) Pending legislation: Overview:
(6) Cases involving “grassroots” lobbying violations:
(7) Pending legislation: Cases in which no violation was found:
(8) Pending legislation: Providing assistance to private lobbying
groups:
(9) Promotion of legislative proposals: Prohibited activity short of
grass roots lobbying:
(10) Federal employees’ communications with Congress:
A. General Principles:
1. Introduction: 31 U.S.C. § 1301(a):
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Simple, concise, and direct, this statute was originally enacted in
1809 (ch. 28, § 1, 2 Stat. 535, (Mar. 3, 1809)) and is one of the
cornerstones of congressional control over the federal purse. Because
money cannot be paid from the Treasury except under an appropriation
(U.S. Const. art. I, § 9, cl. 7), and because an appropriation must be
derived from an act of Congress, it is for Congress to determine the
purposes for which an appropriation may be used. Simply stated, 31
U.S.C. § 1301(a) says that public funds may be used only for the
purpose or purposes for which they were appropriated. It prohibits
charging authorized items to the wrong appropriation, and unauthorized
items to any appropriation. See, e.g., B-302973, Oct. 6, 2004 (agency
could not charge authorized activities such as cost comparison studies
to an appropriation that specifically prohibits its use for such
studies). Anything less would render congressional control largely
meaningless. An earlier Treasury Comptroller was of the opinion that
the statute did not make any new law, but merely codified what was
already required under the Appropriations Clause of the Constitution.
4 Lawrence, First Comp. Dec. 137, 142 (1883).
2. Determining Authorized Purposes:
Page 4-11 – Replace the first full paragraph with the following:
Once the purposes have been determined by examining the various pieces
of legislation, 31 U.S.C. § 1301(a) comes into play to restrict the
use of the appropriation to these purposes only, together with one
final generic category of payments—payments authorized under general
legislation applicable to all or a defined group of agencies and not
requiring specific appropriations. For example, legislation enacted in
1982 amended 12 U.S.C. § 1770 to authorize federal agencies to provide
various services, including telephone service, to employee credit
unions. Pub. L. No. 97-320, § 515, 96 Stat. 1469, 1530 (Oct. 15,
1982). Prior to this legislation, an agency would have violated 31
U.S.C. § 1301(a) by providing telephone service to a credit union,
even on a reimbursable basis, because this was not an authorized
purpose under any agency appropriation. 60 Comp. Gen. 653 (1981). The
1982 amendment made the providing of special services to credit unions
an authorized agency function, and hence an authorized purpose, which
it could fund from unrestricted general operating appropriations. 66
Comp. Gen. 356 (1987). Similarly, a recently enacted statute gives
agencies the discretion to use appropriated funds to pay the expenses
their employees incur for obtaining professional credentials. 5 U.S.C.
§ 5757(a); B-289219, Oct. 29, 2002. See also B-302548, Aug. 20, 2004
(section 5757(a) does not authorize the agency to pay for an employee’
s membership in a professional association unless membership is a
prerequisite to obtaining the professional license or certification).
Prior to this legislation, agencies could not use appropriated funds
to pay fees incurred by their employees in obtaining professional
credentials. See, e.g., 47 Comp. Gen. 116 (1967). Other examples are
interest payments under the Prompt Payment Act (31 U.S.C. §§ 3901–
3907) and administrative settlements less than $2,500 under the
Federal Tort Claims Act (28 U.S.C. §§ 2671–2680).
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Where an appropriation specifies the purpose for which the funds are
to be used, 31 U.S.C. § 1301(a) applies in its purest form to restrict
the use of the funds to the specified purpose. For example, an
appropriation for topographical surveys in the United States was not
available for topographical surveys in Puerto Rico. 5 Comp. Dec. 493
(1899). Similarly, an appropriation to install an electrical
generating plant in the customhouse building in Baltimore could not be
used to install the plant in a nearby post office building, even
though the plant would serve both buildings and thereby reduce
operating expenses. 11 Comp. Dec. 724 (1905). An appropriation for the
extension and remodeling of the State Department building was not
available to construct a pneumatic tube delivery system between the
State Department and the White House. 42 Comp. Gen. 226 (1962). In
another example involving a line-item appropriation for a grant
project, because the funds were made available for a specific grantee
in a specific amount to accomplish a specific purpose, the agency
could not grant less than Congress has directed by using some of the
appropriation to pay its administrative costs. 72 Comp. Gen. 317
(1993); 69 Comp. Gen. 660, 662 (1990). An appropriation to the
Department of Labor for payment to the New York Workers’ Compensation
Board for the processing of claims related to the September 11, 2001,
terrorist attack on the World Trade Center was not available to make
payments to other New York State entities. B-303927, June 7, 2005.
And, as noted previously, an appropriation for the “replacement” of
state roads could not be used to make improvements on them. 41 Comp.
Gen. 255 (1961).
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It is well settled, but warrants repeating, that even an expenditure
that may be reasonably related to a general appropriation may not be
paid out of that appropriation where the expenditure falls
specifically within the scope of another appropriation. 63 Comp. Gen.
422 (1984); B-300325, Dec. 13, 2002; B-290005, July 1, 2002. It is
also well settled that when two appropriations are available for the
same purpose, the agency must select which to use, and that once it
has made an election, the agency must continue to use the same
appropriation for that purpose unless the agency, at the beginning of
the fiscal year, informs Congress of its intent to change for the next
fiscal year. B-307382, Sept. 5, 2006; B-272191, Nov. 4, 1997. See also
68 Comp. Gen. 337 (1989); 59 Comp. Gen. 518 (1980). An exception to
this requirement is when Congress specifically authorizes the use of
two appropriation accounts. B-272191 (statutory language makes clear
that Congress intended that the “funds appropriated to the Secretary
[of the Army] for operation and maintenance” in the fiscal year 1993
Defense Appropriations Act are “[i]n addition to ... the funds
specifically appropriated for real property maintenance under the
heading [RPM,D]” in that appropriation act).
3. New or Additional Duties:
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Similarly, the Bureau of Land Management could use current
appropriations to determine fair market value and to initiate
negotiations with owners in connection with the acquisition of mineral
interests under the Cranberry Wilderness Act,9 even though actual
acquisitions could not be made until funding was provided in
appropriation acts. B-211306, June 6, 1983. See also B-290011, Mar.
25, 2002; B-153694, Oct. 23, 1964; B-153694, Sept. 2, 1964. Of course,
an appropriation is not available if Congress has prohibited the
agency from using it. In B-308715, Apr. 20, 2007, the Department of
Energy is specifically barred under 42 U.S.C. § 7278 from using funds
made available under an Energy and Water Development Appropriations
Act to implement or finance any authorized loan guarantee program
unless specific provision has been made for that program in an
appropriations act. Since no provision was made, Energy could not use
the Energy and Water appropriation to begin implementing the loan
guarantee program.
B. The “Necessary Expense” Doctrine:
1. The Theory:
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In addition to recognizing the differences among agencies when
applying the necessary expense rule, we act to maintain a vigorous
body of case law responsive to the changing needs of government. In
this regard, our decisions indicate a willingness to consider changes
in societal expectations regarding what constitutes a necessary
expense. This flexibility is evident, for example, in our analysis of
whether an expenditure constitutes a personal or an official expense.
As will be discussed more fully later in the chapter, use of
appropriations for such an expenditure is determined by continually
weighing the benefit to the agency, such as the productivity, safety,
recruitment, and retention of a dynamic workforce and other
considerations enabling efficient, effective, and responsible
government. We recognize, however, that these factors can change over
time. B-302993, June 25, 2004 (modifying earlier decisions to reflect
determination that purchase of kitchen appliances for use by agency
employees in an agency facility is reasonably related to the efficient
performance of agency activities, provides other benefits such as
assurance of a safe workplace, and primarily benefits the agency, even
though employees enjoy a collateral benefit); B-286026, June 12,
2001(overruling GAO’s earlier decisions based on reassessment of the
training opportunities afforded by examination review courses); B-
280759, Nov. 5, 1998 (overruling GAO’s earlier decisions on the
purchase of business cards). See also 71 Comp. Gen. 527 (1992)
(eldercare is not a typical employee benefit provided to the
nonfederal workforce and not one that the federal workforce should
expect); B-288266, Jan. 27, 2003 (GAO explained it remained “willing
to reexamine our case law” regarding light refreshments if it is shown
to frustrate efficient, effective, and responsible government).
Page 4-22 – Replace the citations after the numbered paragraph 3 with
the following:
E.g., B-303170, Apr. 22, 2005; 63 Comp. Gen. 422, 427–28 (1984); B-
240365.2, Mar. 14, 1996; B-230304, Mar. 18, 1988.
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The important thing is not the significance of the proposed
expenditure itself or its value to the government or to some social
purpose in abstract terms, but the extent to which it will contribute
to accomplishing the purposes of the appropriation the agency wishes
to charge. For example, the Forest Service can use its appropriation
for “Forest Protection and Utilization” to buy plastic litterbags for
use in a national forest. 50 Comp. Gen. 534 (1971). See also 72 Comp.
Gen. 73 (1992) (the Environmental Protection Agency (EPA) can purchase
buttons promoting indoor air quality for its conference since the
message conveyed is related to EPA’s mission); 71 Comp. Gen. 28 (1991)
(the Internal Revenue Service (IRS) can cover cost of its employees
filing electronic tax returns because it trains employees); B-257488,
Nov. 6, 1995 (the Food and Drug Administration is permitted to
purchase “No Red Tape” buttons to promote employee efficiency and
effectiveness and thereby the agency’s purpose). However, operating
appropriations of the Equal Employment Opportunity Commission (EEOC)
are not available to pay IRS the taxes due on judgment proceeds
recovered by EEOC in an enforcement action. While the payment would
further a purpose of the IRS, it would not contribute to fulfilling
the purposes of the EEOC appropriation. 65 Comp. Gen. 800 (1986).14
See also B-323122, Aug. 24, 2012 (Consumer Product Safety Commission
may not issue gift cards to Web site subscribers where it does not
establish that gift card distribution is essential to achieve a
statutory responsibility); 70 Comp. Gen. 248 (1991) (purchasing T-
shirts for Combined Federal Campaign (CFC) contributors is not
permitted because T-shirts are not essential to achieving the
authorized purpose of CFC).
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For example, in August 2004, in response to an elevated national
security threat level with respect to Washington, D.C., the Capitol
Police established the Security Traffic Checkpoint Program (STCP),
which consisted of 14 security traffic checkpoints intended to secure
all streets to the two main avenues leading to the Capitol building.
Under this program, Capitol Police officers were required to staff the
14 checkpoints on a 24-hour, 7-days-a-week basis, with each officer
working 12-hour shifts. During the STCP’s operation from August 2,
2004, until November 23, 2004, the Capitol Police incurred
approximately $1.3 to $1.5 million in overtime expenses every pay
period. The Capitol Police financed the overtime expenses related to
the program with money transferred to it from the Emergency Response
Fund (ERF) established by Congress to, among other things, fund
counterterrorism measures and support national security. Pub. L. No.
107-38, 115 Stat. 220 (Sept. 18, 2001). GAO was asked whether the use
of the ERF for the STCP overtime payments was a proper use of the ERF
appropriation. In finding that there was a reasonable nexus between
the overtime expenditure and ERF appropriation charged, GAO stated:
“Law enforcement agencies are entitled to discretion in deciding how
best to protect our national institutions, such as the United States
Congress, its Members, staff, and facilities. Here, the Capitol Police
implemented the STCP in reaction to the heightened terror alert in
August 2004 due to intelligence information suggesting the strong
possibility of a terrorist attack at the Capitol Complex ... The STCP
checkpoints, clearly, were a counterterrorism measure, and certainly
fall within the very broad scope of ‘supporting national security.’
... So long as the agency’s use of the appropriation serves one of the
... purposes for which the appropriation was enacted, the agency
cannot be said to have used the appropriation improperly.”
B-303964, Feb. 3, 2005, at 5.
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Conference-related expenses may also be authorized as necessary
expenses where the agency is authorized to host the conference. B-
300826, Mar. 3, 2005. Cf. B-306424, Mar. 24, 2006 (Congress authorized
the Presidio Trust to lease Presidio property as a venue for public
and private events; thus the Trust’s appropriations were available to
cover expenses, such as the costs of providing audio equipment and
related services, incurred during the National Academy of Public
Administration’s use of the Presidio’s facilities for its 2005 annual
Board of Directors meeting.)
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However, specific statutory authority is not essential. If
participation is directly connected with and is in furtherance of the
purposes for which a particular appropriation has been made, and an
appropriate administrative determination is made to that effect, the
appropriation is available for the expenditure. B-290900, Mar. 18,
2003 (Bureau of Land Management (BLM) may use its appropriated funds
to pay its share of the cost to produce a brochure that educates the
public regarding lighthouse preservation because the brochure supports
BLM in meeting its responsibility under its lighthouse preservation
program); B-286457, Jan. 29, 2001 (demolition of old air traffic
control tower that would obstruct the view from the new one is
directly connected with and in furtherance of the construction of a
new tower such that the demolition expenses are covered by Federal
Aviation Administration’s appropriation act for tower construction); B-
280440, Feb. 26, 1999 (Immigration and Naturalization Service’s (INS)
Salaries and Expenses appropriation is available to purchase medals to
be worn by uniformed employees of the Border Patrol division of INS to
commemorate the division’s 75th anniversary). See also 16 Comp. Gen.
53 (1936); 10 Comp. Gen. 282 (1930); 7 Comp. Gen. 357 (1927); 4 Comp.
Gen. 457 (1924).[Footnote 15] Authority to disseminate information
will generally provide adequate justification. E.g., 7 Comp. Gen. 357;
4 Comp. Gen. 457. In addition, an agency may use appropriated funds to
provide prizes or incentives to individuals to further the collection
of information necessary to accomplish the agency’s statutory
mandate.16 See, e.g., B-310981, Jan. 25, 2008; B-304718, Nov. 9, 2005;
B-286536, Nov. 17, 2000; 70 Comp. Gen. 720 (1991); B-230062, Dec. 22,
1988. But see B-323122, Aug. 24, 2012 (Consumer Product Safety
Commission may not use appropriated funds to issue gift cards to
individuals subscribing to a safety oriented Web site where it does
not establish that gift card distribution is essential to achieve a
statutory responsibility).
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Also, the Army could not use its Other Procurement, Army appropriation
to pay contractors for logistical planning and plan implementation
services related to the medical equipment items acquired using that
appropriation because such services are not procurement activities and
the Army’s Operation and Maintenance appropriation was available and
should be charged for such services. B-303170, Apr. 22, 2005.
2. General Operating Expenses:
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The Salaries and Expenses appropriation of the Internal Revenue
Service (IRS) could be used to procure credit bureau reports if
administratively determined to be necessary in connection with
investigating applicants for employment with the IRS. B-117975, Dec.
29, 1953. However, the Customs and Border Protection’s (CBP) Salaries
and Expenses appropriation was not available to pay for credit
monitoring services for its employees in the New Orleans area who, as
a result of Hurricane Katrina, were victims of identity theft. Neither
government action nor inaction compromised the employees’ identities,
and in this case the CBP employees individually, not the government,
would be the primary beneficiaries of the proposed credit monitoring,
which was considered part of the employees’ overall management of
their personal finances. B-309604, Oct. 10, 2007.
GAO considered different circumstances in B-310865, Apr. 14, 2008,
where the proposed purchase of credit monitoring services related to a
data breach caused by government action or inaction that compromised
employees’ or private citizens’ identities. The Nuclear Regulatory
Commission (NRC) asked whether, in the event of such a breach, payment
for credit monitoring services would be permissible as a cost-
effective means of addressing the adverse consequences resulting from
the government’s mistaken disclosure of an employee’s or private citizen
’s personal information. Recognizing that Congress has required
agencies to address breaches and mitigate risks when government action
or inaction mistakenly compromises personal information, GAO concluded
that the purchase of credit monitoring services for affected
individuals would constitute a means of mitigating the risks as long
as the agency determined that it was necessary under the particular
circumstances.
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Outplacement assistance to employees may be regarded as a legitimate
matter of agency personnel administration if the expenditures are
found to benefit the agency and are reasonable in amount. 68 Comp.
Gen. 127 (1988); B-272040, Oct. 29, 1997. The Government Employees
Training Act authorizes training in preparation for placement in
another federal agency under conditions specified in the statute. 5
U.S.C. § 4103(b). Similarly, employee retirement education and
retirement counseling, including individual financial planning for
retirement, fall within the legitimate range of an agency’s discretion
to administer its personnel system and therefore are legitimate agency
expenses. B-301721, Jan. 16, 2004.
C. Specific Purpose Authorities and Limitations:
1.Introduction:
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A common source of purpose restrictions is the appropriation act
itself. Restrictions are often included as provisos to the
appropriating language or as general provisions or “riders.” For
example, B-321982, Oct. 11, 2011, involved the application of section
1340 of the Full-Year Continuing Appropriations Act, 2011, which
prohibited the Office of Science and Technology Policy (OSTP) from
using funds appropriated to, among other things, engage in bilateral
activities with the government of the People's Republic of China or
Chinese-owned companies unless specifically authorized. In May 2011,
OSTP incurred costs by participating in the U.S.-China Dialogue on
Innovation Policy and the U.S.-China Strategic and Economic Dialogue.
GAO concluded because OSTP was prohibited from using appropriated
funds to participate in the May 2011 meetings, OSTP violated section
1340 and the Antideficiency Act. See also B-277905, Mar. 17, 1998
(expenditure for installation and maintenance of water pipeline to
support a military base golf course not permissible because such
expenditure is specifically prohibited by 10 U.S.C. § 2246, which
prohibits the use of appropriated funds to “equip, operate, or maintain”
a golf course); B-247348, June 22, 1992 (detail of Government
Printing Office employee to Library of Congress not permissible
because 44 U.S.C. § 316 prohibits details for “duties not pertaining
to the work of public printing and binding).
3. Attorney’s Fees:
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The award includes “fees and other expenses.” “Fees” means a
reasonable attorney’s fee, generally capped at $125 per hour unless
the agency determines by regulation that cost-of-living increases or
other special factors justify a higher rate.39 5 U.S.C. §
504(b)(1)(A). The Supreme Court held that “fees” includes any
paralegal fees that the prevailing party incurred either through its
litigating attorney or independently, so the prevailing party is
entitled to recover fees for the paralegal services at the market rate
for such services. Richlin Security Service Co. v. Chertoff, 553 U.S.
571 (2008). “Other expenses” include such items as expert witness
expenses and the necessary cost of studies, analyses, engineering
reports, etc. 5 U.S.C. § 504(b)(1)(A).
5. Entertainment – Recreation – Morale and Welfare:
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While feeding employees may not be regarded as a “necessary expense”
as a general proposition, it may qualify when the agency is carrying
out some particular statutory function where the necessity
relationship can be established. Thus, in B-300826, Mar. 3, 2005, the
National Institutes of Health (NIH) could use appropriated funds to
provide meals and light refreshments to federal government (as well as
nonfederal) attendees and presenters at an NIH-sponsored conference to
coordinate and discuss Parkinson’s disease research efforts within the
scientific community. The conference was held in furtherance of NIH’s
statutory mission in 42 U.S.C. § 281 to “conduct and support” research
with respect to particular diseases, and it was therefore within NIH’s
authority to pay for all legitimate, reasonable costs of hosting the
formal conference. GAO determined that providing meals and
refreshments was an allowable conference cost so long as the meals and
refreshments were incidental to the conference, attendance at the
meals was important to ensure full participation in the conference,
and the meals and refreshments were part of a formal conference that
included substantial functions occurring separately from when the food
is served.
In another case GAO concluded that it was a permissible implementation
of a statutory accident prevention program for the Marine Corps to set
up rest stations on highways leading to a Marine base to serve coffee
and doughnuts to Marines returning from certain holiday weekends. B-
201186, Mar. 4, 1982. See also 65 Comp. Gen. 738 (1986) (refreshments
at awards ceremonies), discussed later in this section. A related
example is B-235163.11, Feb. 13, 1996, in which GAO determined that
appropriated funds could be used to pay for the dinner of a nonfederal
award recipient and her spouse at a National Science Foundation awards
ceremony because of the statutory nature of the award. Exceptions of
this type illustrate the relativity of the necessary expense doctrine
pointed out earlier in our general discussion.
Page 4-116 – Insert the following after the first full paragraph:
In another case, GAO determined that food could be a proper training
expense for federal civilian employees and military members where the
food was necessary for the employees and members to obtain the full
benefit of an antiterrorism training exercise conducted by the U.S.
Army Garrison Ansbach. B-317423, Mar. 9, 2009. The purpose of the
training was to simulate realistic antiterrorism scenarios, which
could very well require nonstop participation through mealtimes in
order to protect life and property. Id.
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General operating appropriations may be used to provide refreshments
at award ceremonies under the Government Employees Incentive Awards
Act, 5 U.S.C. §§ 4501–4506. 65 Comp. Gen. 738 (1986)); B-271511, Mar.
4, 1997. The Act authorizes an agency to use its operating
appropriations to cover the “necessary expense for the honorary
recognition of” the employee or employees receiving the awards. 5
U.S.C. § 4503. The Act directs the Office of Personnel Management to
prescribe regulations and instructions to govern agency awards
programs. 5 U.S.C. § 4506.
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The purchase of equipment for use in other than an established
cafeteria may also be authorized when the agency determines that the
primary benefit of its use accrues to the agency by serving a valid
operational purpose, such as providing for an efficient working
environment or meeting health needs of employees, notwithstanding a
collateral benefit to the employees. In B-302993, June 25, 2004, GAO
approved the purchase of kitchen appliances, ordinarily considered to
be personal in nature, for common use by employees in an agency
facility. The appliances included refrigerators, microwaves, and
commercial coffee makers. The agency demonstrated that equipping the
workplace with these appliances was reasonably related to the
efficient performance of agency activities and provided other benefits
to the agency, including the assurance of a safe workplace. GAO also
advised the agency that it should establish policies for uniform
procurement and use of such equipment. In developing a policy, the
agency should address the ongoing need for specific equipment
throughout the building, the amount of the agency’s appropriation
budgeted for this purpose, price limitations placed on the equipment
purchases, and whether the equipment should be purchased centrally or
by individual units within headquarters. It is important that the
policy ensure that appropriations are not used to provide any
equipment for the sole use of an individual, and that the agency
locate refrigerators, microwaves, and coffee makers acquired with
appropriated funds only in common areas where they are available for
use by all personnel. It should also be clear that appropriated funds
will not be used to furnish goods, such as the coffee itself or
microwaveable frozen foods, to be used in the kitchen area. These
remain costs each employee is expected to bear.
The decision in B-302993, June 25, 2004, represented a departure from
earlier cases which permitted such purchases under more restrictive
circumstances where the agency could identify a specific need:
* B-180272, July 23, 1974: purchase of a sink and refrigerator to
provide lunch facilities for the Occupational Safety and Health Review
Commission where there was no government cafeteria on the premises.
* B-210433, Apr. 15, 1983: purchase of microwave oven by Navy facility
to replace nonworking stove. Facility was in operation seven days a
week, some employees had to remain at their duty stations for 24-hour
shifts, and there were no readily accessible eating facilities in the
area during nights and weekends.
* B-276601, June 26, 1997: purchase of a refrigerator for personal
food items of Central Intelligence Agency (CIA) employees. CIA
headquarters facility was relatively distant from private eating
establishments, the CIA did not permit delivery service to enter the
facility due to security concerns, and the cafeteria served only
breakfast and lunch.
* B-173149, Aug. 10, 1971: purchase of a set of stainless steel
cooking utensils for use by air traffic controllers to prepare food at
a flight service station where there were no other readily accessible
eating facilities and the employees were required to remain at their
post of duty for a full 8-hour shift.
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The decision at 60 Comp. Gen. 303 was expanded in B-199387, Mar. 23,
1982, to include small “samples” of ethnic foods prepared and served
during a formal ethnic awareness program as part of the agency’s equal
employment opportunity program. In the particular program being
considered, the attendees were to pay for their own lunches, with the
ethnic food samples of minimal proportion provided as a separate
event. Thus, the samples could be distinguished from meals or
refreshments, which remain unauthorized. (The decision did not specify
how many “samples” an individual might consume in order to develop a
fuller appreciation.) Compare that situation to the facts in B-301184,
Jan. 15, 2004, where GAO found that the U.S. Army Corps of Engineers’
appropriation was not available to pay for the costs of food offered
at the Corps’ North Atlantic Division’s February 2003 Black History
Month program. The evidence in the record, including the time of the
program, the food items served, and the amounts available, indicated
that a meal, not a sampling of food, was offered.
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Similarly, GAO advised that serving refreshments purchased with
appropriated funds to local children as part of the Forest Service’s “
Kid’s Fishing Day” did not promote cultural awareness. While it may
have been important that children learn to fish and appreciate the
outdoors, such a goal did not advance federal EEO objectives. B-
302745, July 19, 2004.
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following:
Just as the entertainment of government personnel is generally
unauthorized, the entertainment of nongovernment personnel is equally
impermissible. The basic rule is the same regardless of who is being
fed or entertained: Appropriated funds are not available for
entertainment, including free food, except under specific statutory
authority. Because of the clear potential for abuse, we find
exceptions to the general rule only rarely. In cases such as this, the
issue presented is the availability of the public’s money to supply
goods and services that inure to the benefit of individuals. We
generally resolve this issue by assessing the benefits to the agency
from any such expenditure. The determining factor is whether, on
balance, the agency or the individual receives the primary benefit. B-
309604, Oct. 10, 2007; B-302993, June 25, 2004. We will consider
exceptions to the general rule only after careful consideration of the
particular factual circumstances. Any exception, therefore, is
necessarily case-specific. B-318499, Nov. 19, 2009.
Two of the most frequently cited decisions for the general rule are 5
Comp. Gen. 455 (1925) and 26 Comp. Gen. 281 (1946). In 5 Comp.
Gen. 455, expenditures by two Army officers for entertaining officials
of foreign governments while making arrangements for an around-the-
world flight were disallowed. In 26 Comp. Gen. 281, appropriations
were held unavailable for dinners and luncheons for “distinguished
guests” given by a commissioner of the Philippine War Damage
Commission. Other early decisions on point are: 5 Comp. Gen. 1018
(1926); B-85555, June 6, 1949; and A-10221, Oct. 8, 1925. A limited
exception was recognized in B-22307, Dec. 23, 1941, to permit
entertainment of officials of foreign governments incident to the
gathering of intelligence for national security.
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In a 1979 decision, appropriations of the Equal Employment Opportunity
Commission were found not available to host a reception for Hispanic
leaders in conjunction with a planning conference. B-193661, Jan. 19,
1979. The case fell squarely within the general rule. So did B-205292,
June 2, 1982, involving a Fourth of July fireworks display by a Navy
station, justified as a community relations measure. While good
community relations may be desirable for all government agencies,
fireworks are not necessary to the operation and maintenance of the
Navy. See also B-310023, Apr. 17, 2008 (providing light refreshments
to attendees of National Trails Day events does not contribute
materially to the accomplishment of an authorized U.S. Forest Service
function).
Page 4-125 – Insert the following, including the reference to new
footnote number 72a, after the first paragraph:
An agency was found to have the requisite statutory authority to
provide meals and refreshments to nonfederal personnel in B-300826,
Mar. 3, 2005. In that case, GAO considered whether the National
Institutes of Health (NIH) could use appropriated funds to provide
meals and light refreshments to both federal and nonfederal attendees
and presenters at a conference NIH was hosting on the latest
scientific advances in treating Parkinson’s disease. After reviewing
NIH’s statutory authority to conduct and support research to further
the treatment of diseases, GAO concluded that NIH had the requisite
authority to host the conference to which NIH had invited experts from
the private sector as well as from other federal agencies, in addition
to researchers from its own research institutes. NIH was not barred by
the prohibition of 31 U.S.C. § 1345 from providing food to nonfederal
personnel. As GAO explained, section 1345 has limited application,
addressing only those conventions and other forms of assemblages or
gatherings that private organizations seek to hold at government
expense. B-300826, at 4 n.5. The decision cited 72 Comp. Gen. 229
(1993), which effectively overruled prior GAO decisions that applied
section 1345 to meetings and conferences other than assemblages and
gatherings that private organizations sought to hold at government
expense.72a 72 Comp. Gen. at 231.
To determine whether the costs of meals and refreshments at such an
agency-hosted conference are necessary to achieve the conference
objectives, GAO established the following criteria: (1) the meals and
refreshments are incidental to the formal conference, (2) attendance
at the meals and when refreshments are served is important for the
host agency to ensure attendees’ full participation in essential
discussion, lectures, or speeches concerning the purpose of the formal
conference, and (3) the meals and refreshments are part of a formal
conference that includes substantial functions occurring separately
from when the food is served. Since the NIH proposal met these
criteria, NIH could provide meals and refreshments at the Parkinson’s
disease conference. In so finding, GAO noted that the listed criteria
must be applied on a case-by-case basis and advised federal agencies
to develop procedures to ensure that the provision of meals and
refreshments meet the criteria.
Another aspect of hosting a conference addressed in B-300826 concerned
whether NIH could charge an attendance fee at the conference and
retain the proceeds, or permit its contractor to do so. GAO held that
without specific statutory authority an agency hosting a conference
may not charge and retain an attendance fee, and the agency may not
cure that lack of authority by engaging a contractor to do what it may
not do. A contractor in this situation is “receiving money for the
Government,” and the miscellaneous receipts statute, 31 U.S.C. §
3302(b), requires that such funds must be deposited in the Treasury.
This decision in B-300826 was affirmed in B-306663, Jan. 4, 2006. For
more on the miscellaneous receipts statute, see Chapter 6, section E.2.
In 2006, Congress provided the Department of Defense (DOD) with
specific authority to accept and retain fees from any individual or
commercial participant in conferences, seminars, exhibitions,
symposiums, or similar meetings conducted by DOD. Pub. L. No.
109-364, 120 Stat. 2083, 2395–96 (Oct. 17, 2006), codified at 10
U.S.C. § 2262. DOD may arrange for the collection of such fees either
directly or through a contractor, and the fees may be collected in
advance of the conference. 10 U.S.C. § 2262(a)(2). Amounts collected
under this provision are credited to the appropriation or account from
which the costs of the conference are paid, but any amount exceeding
those costs must be deposited into the Treasury as miscellaneous
receipts. 10 U.S.C. §§ 2262(b), (c). DOD is required to report
annually on the number of conferences for which fees were collected,
the amount of fees collected, and the actual costs of the conferences,
including costs associated with any conference coordinators. 10 U.S.C.
§ 2262(d).
Page 4-125 – Insert the following as new footnote number 72a:
72a The Department of Justice Office of Legal Counsel (OLC) has stated
that it disagrees with our decision in B-300826, Mar. 3, 2005, insofar
as it permits agencies to provide meals and light refreshments to
nonfederal personnel. Memorandum Opinion for the General Counsel,
Environmental Protection Agency, Use of Appropriated Funds to Provide
Light Refreshments to Non-Federal Participants at EPA Conferences, OLC
Opinion, Apr. 5, 2007.
Page 4-125 – Insert the following after the third paragraph:
The Veterans Benefits Administration (VBA) of the Department of
Veterans Affairs (VA) inquired whether it may use appropriated funds
to pay for incentives in the form of refreshments or light meals to
increase participation in and the effectiveness of focus groups. Under
38 U.S.C. § 527(a), the VA is required to “measure and evaluate” its
programs, and the VBA has been tasked with collecting this
information. While VBA obtains information from a variety of sources,
including mail or internet surveys and telephone interviews, VBA has
determined that the use of focus groups is the best method of
gathering this feedback and that the provision of refreshments to the
participants is very helpful both in attracting these participants and
getting useful information from the focus groups. Focus group
participants are not VBA employees but are veterans and family members
of veterans served by VBA. GAO concluded that, to the extent VBA
determines that it needs to offer refreshments and light meals as an
incentive to maximize participation by nonemployee veterans and their
families in focus groups to fulfill its statutory requirement, VBA
could use its appropriated funds to do so. However, GAO cautioned that
VBA should provide such incentives pursuant to an appropriate,
enforceable policy with procedures for approval to ensure that
incentives are only provided when necessary and are used strictly for
nonemployee focus groups. B-304718, Nov. 9, 2005. Compare B-318499,
Nov. 19, 2009 (a Navy command which did not identify a specific
statutory objective may not use appropriated funds to pay for lunch
for nonfederal participants of a focus group on readiness and quality
of life issues).
The U.S. Army Garrison Ansbach (Ansbach) asked whether its
appropriated funds could be used to purchase food for nonfederal
participants at annual antiterrorism training exercises conducted by
Ansbach. These exercises are conducted pursuant to Department of
Defense and Department of the Army requirements and are intended to
help identify and reduce antiterrorism vulnerabilities and test
antiterrorism response plans and procedures. The role of the
nonfederal participants, which could include contract installation
guards and host nation police, fire department, local Red Cross, and
city officials, is to provide a real world response to the simulated
terrorist incident. GAO had no objection to the Ansbach commander’s
determination to use appropriations to provide food to the federal
participants in the training because an actual antiterrorism response
could very well require nonstop participation. GAO, recognizing the
importance of local cooperation in responding to emergency situations,
concluded that Ansbach could provide food to nonfederal personnel so
long as the Ansbach commander determined that their participation in
the training is essential to accomplishing the required training of
Department of Defense and Army employees and to simulating realistic
antiterrorism scenarios. B-317423, Mar. 9, 2009. GAO suggested that,
in order to enhance the simulated nature of the exercise and to test
the delivery apparatus, Ansbach would want the food to resemble those
types of meals and snacks that one would expect to be provided during
an actual antiterrorism response. Id.
Page 4-130 – Replace footnote number 76 with the following:
[76] The statutes and cases discussed in this section concern the use
of appropriated funds for federal child care facilities. They do not
concern child care expenses incurred by federal employees as travel
costs. See, e.g., B-246829, May 18, 1992 (“Our decisions have clearly
held that fees for child care are not reimbursable expenses in
connection with an employee’s travel or relocation since neither the
governing statutes nor the [Federal Travel Regulations] authorize such
an entitlement.”).
7. Firefighting and Other Municipal Services:
Page 4-154 – Insert the following after the first full paragraph:
In another case, GAO found the District of Columbia’s 9-1-1
emergency telephone system surcharge as originally enacted to be an
impermissible tax on the federal government because the legal
incidence of the tax fell on the federal government. Subsequently, the
District of Columbia amended its law such that the legal incidence of
the tax falls on the providers of telephone service, not the users of
telephone service. Thus, federal agencies could pay bills that itemize
the surcharge that the vendors must pay. B-302230, Dec. 30, 2003.
8. Gifts and Awards:
Page 4-155 – Replace the second full paragraph with the following:
An agency frequently wants to use gifts to attract attention to the
agency or to specific programs. For example, gifts can be used as
recruiting and retention tools, to commemorate an event, or to inform
the public or agency employees about the agency. Appropriated funds
may not be used for personal gifts, unless, of course, there is
specific statutory authority. B-307892, Oct. 11, 2006 (under 10 U.S.C.
§ 2261, Navy may use appropriated funds to purchase gifts for sailors
to commemorate their reenlistment subject to regulations issued by the
Secretary of Defense). See also 68 Comp. Gen. 226 (1989). To state the
rule in this manner is to make it appear rather obvious. If, for
example, a General Counsel decided it would be a nice gesture and
improve employee morale to give each lawyer in the agency a
Thanksgiving turkey, few would argue that the expense should be borne
by the agency’s appropriations. Appropriated funds could not be used
because the appropriation was not made for this purpose (assuming, of
course, that the agency has not received an appropriation for
Thanksgiving turkeys) and because giving turkeys to lawyers is not
reasonably necessary to carry out the mission at least of any agency
that now exists. Most cases, however, are not quite this obvious or
simple.
Page 4-159 – Insert the following two paragraphs after the third full
paragraph:
In B-310981, Jan. 25, 2008, GAO determined that the National
Telecommunications and Information Administration (NTIA) may use
appropriated funds to purchase $25 gift cards as an incentive to
encourage 220 individuals participating in a pilot test to complete
and return a survey. The survey was designed to gather information
about NTIA’s statutorily required converter box coupon program. NTIA
deemed this information essential to the success of the $1.5 billion
program. GAO agreed that there was a direct connection between the use
of the gift cards and the production of information important to
carrying out NTIA’s statutory duties, and the amount involved was
modest, so the primary beneficiary of the expenditure was the
government.
By contrast, in B-323122, Aug. 24, 2012, GAO held that the Consumer
Product Safety Commission may not use its salaries and expenses
appropriation to distribute $5 gift cards to individuals who subscribe
to a product safety Web site. The Commission created the site to
disseminate information to certain hard-to-reach populations including
the elderly, low-income families, and some minority groups. GAO found
that, while the Web site itself may further the Commission’s mission,
the Commission failed to establish how gift card distribution was
essential to achieve the Commission’s statutory responsibilities,
namely, increasing the flow of information to hard-to-reach
populations. GAO reminded the agency that though its objective may be
laudable, it may not purchase personal items with appropriated funds
unless those items are essential, as opposed to preferable, to the
achievement of an authorized purpose. GAO also held that the
Commission could not permit a contractor to purchase the gift cards—an
agency may not direct a contractor to undertake activities on behalf
of the agency that the agency itself may not undertake.
Page 4-160 – Insert the following after the first partial paragraph:
In B-318386, Aug. 12, 2009, GAO considered the use of appropriations
for items that would contain images of protected waterfowl as part of
an ongoing conservation strategy under the Endangered Species Act,
when other conservation strategies had failed. The U.S. Fish and
Wildlife Service (FWS) is responsible for implementing programs for
the conservation of threatened species. The population of two
threatened waterfowl species had been declining in Alaska for a number
of years as a result of hunting, partially due to the hunters’
inability to distinguish the protected species from those related
waterfowl that are legal to hunt, notwithstanding numerous FWS
education efforts. Having had no impact on mortality rates in past
years, FWS proposed to undertake an aggressive education strategy that
would include purchasing caps and other items that contain images of
the protected waterfowl and simple conservation messages, and then
distributing these items at public outreach meetings where agency
staff are speaking about waterfowl conservation. GAO did not object to
the use of appropriated funds to purchase these items in these
circumstances because distribution of the items advances FWS’s
objective of protecting threatened species by educating the recipients
of the items, as well as others who view those items even though they
may not have attended an outreach meeting, and because of FWS’s past
lack of success.
Page 4-161 – Insert the following after the third full paragraph:
In another case, a Natural Resources Conservation Service (NRCS)
employee sought reimbursement of fees he incurred when he entered NRCS
publications in an awards contest that recognizes professional skill
and excellence in developing public outreach materials, and employs
communications professionals as judges to provide critique and
detailed feedback. The contest made awards in the name of the agency
for six of the nine NRCS entries. GAO determined that NCRS has
statutory authority to disseminate information, so participation in
the contest and the feedback provided could aid in NCRS’s review of
its outreach programs. B-317891, May 26, 2009. Therefore, appropriated
funds could be used to reimburse the employee for the contest fees if
NRCS makes an administrative determination that participation in the
contest serves the agency’s mission. Id.
Page 4-166 – Replace the first full paragraph with the following:
The Incentive Awards Act applies to civilian agencies, civilian
employees of the various armed services and specified legislative
branch agencies. 5 U.S.C. § 4501. Within the judicial branch, it
applies to the United States Sentencing Commission. Id.103 While it
does not apply to members of the armed forces, the Defense Department
has very similar authority for military personnel in 10 U.S.C. § 1124.
Page 4-166 – Replace footnote number 103 with the following:
[103] The Sentencing Commission had not been covered prior to a 1988
amendment to the statute. See 66 Comp. Gen. 650 (1987). The
Administrative Office of the United States Courts is no longer covered
by the statute. Pub. L. No. 101-474, § 5(f), 104 Stat. 1100 (Oct. 30,
1990). The District of Columbia also is no longer covered. When the
District of Columbia Home Rule Act was enacted into law, Pub. L. No.
93-198, 87 Stat. 777 (Dec. 24, 1973), the Act provided for the
continuation of federal laws applicable to the District of Columbia
government and its employees (that for the most part were in title 5
of the United States Code) until such time as the District enacted its
own laws covering such matters. The District has adopted a number of
laws exempting its employees from various provisions of title 5, and
sections 4501 through 4506 are specifically superseded. See D.C.
Official Code, 2001 ed. §1-632.02.
10. Insurance:
Page 4-179 – Replace the first full paragraph with the following:
Another type of insurance which may not be paid for from appropriated
funds is flight or accident insurance for employees on official
travel. If a federal employee traveling by air on official business
wishes to buy flight insurance, it is considered a personal expense
and not reimbursable. B-309715, Sept. 25, 2007; 47 Comp. Gen. 319
(1967); 40 Comp. Gen. 11 (1960). Similarly nonreimbursable is trip
cancellation insurance. 58 Comp. Gen. 710 (1979).
11. Lobbying and Related Matters:
Page 4-188 – Replace the title of section 11 with the following:
11. Lobbying, Publicity or Propaganda, and Related Matters
Page 4-189 – Insert the following after the first full paragraph:
In addition to restrictions on lobbying, this section will explore
restrictions on publicity or propaganda. Since 1951, appropriation
acts have included provisions precluding the use of the appropriations
for “publicity or propaganda.” While Congress has never defined the
meaning of publicity or propaganda, GAO has recognized three types of
activities that violate the publicity or propaganda prohibitions: self-
aggrandizement, covert propaganda, and materials that are purely
partisan in nature.
Page 4-194 – Insert after the following after the first bulleted
paragraph:
* Consumer Product Safety Commission e-mail to swimming pool industry
representative encouraging the recipient to contact Members of
Congress that supported a rule change involving the interpretation of
the phrase “unblockable drain” was not grassroots lobbying because the
e-mail did not address pending legislation. B-322882, Nov. 8. 2012.
Page 4-196 – Insert the following as the first paragraph under “(1)
Origin and general considerations”:
In addition to penal statutes imposing restrictions on lobbying,
lobbying restrictions are found in appropriations acts. Restrictions
on publicity or propaganda are found only in appropriations acts.
Page 4-197 – Replace the first paragraph and quotation with the
following:
The publicity or propaganda prohibition made its first appearance in
1951. Members of Congress expressed concern over a speaking campaign
promoting a national healthcare plan undertaken in the early 1950s by
Oscar R. Ewing, the Administrator of the Federal Security Agency, a
predecessor to the Department of Health and Human Services and the
Social Security Administration. In reaction to this activity,
Representative Lawrence R. Smith introduced the following provision,
which was enacted in the Labor-Federal Security appropriation for
1952, Pub. L. No. 134, ch. 373, § 702, 65 Stat. 209, 223 (Aug. 31,
1951): “No part of any appropriation contained in this Act shall be
used for publicity or propaganda purposes not heretofore authorized by
the Congress.” Later versions of this provision prohibit activity
throughout the government: “No part of any appropriation contained in
this or any other Act shall be used for publicity or propaganda
purposes within the United States not heretofor authorized by the
Congress.”[Footnote 117]
Page 4-197 – Replace footnote number 117 with the following:
[117] See, e.g., the Transportation, Treasury, and related agencies’
appropriations for 2005, Pub. L. No. 108-447, div. H, title VI, § 624,
118 Stat. 2809, 3278 (Dec. 8, 2004) (emphasis added).
Page 4-198 – Insert the following after the quotation and before the
second full paragraph:
Although the publicity and propaganda prohibition has appeared in some
form in the annual appropriations acts since 1951, the prohibitions
themselves provide little definitional guidance as to what specific
activities are publicity or propaganda. GAO has identified three
activities that are prohibited by the publicity or propaganda
prohibition—self-aggrandizement, covert propaganda, and purely
partisan materials.
Page 4-198 – Replace the second full paragraph with the following:
In evaluating whether a given action violates a publicity or
propaganda provision, GAO will rely heavily on the agency’s
administrative justification. In other words, the agency gets the
benefit of any legitimate doubt. GAO will not accept the agency’s
justification where it is clear that the action falls into one of
these categories. Before discussing these categories, two threshold
issues must be noted.
Page 4-199 – Replace the first three paragraphs under “(2) Self-
aggrandizement” and move the heading as follows:
As noted above, the broadest form of the publicity and propaganda
restriction prohibits the use of appropriated funds “for publicity or
propaganda purposes not authorized by Congress.” A fiscal year 2005
governmentwide variation limits these restrictions to activities “
within the United States.”[Footnote 121]
(2) Self-aggrandizement:
The Comptroller General first had occasion to construe this provision
in 31 Comp. Gen. 311 (1952). The National Labor Relations Board asked
whether the activities of its Division of Information amounted to a
violation. Reviewing the statute’s scant legislative history, the
Comptroller General concluded that it was intended “to prevent
publicity of a nature tending to emphasize the importance of the
agency or activity in question.” 31 Comp. Gen. at 313. Therefore, the
prohibition would not apply to the “dissemination to the general
public, or to particular inquirers, of information reasonably
necessary to the proper administration of the laws” for which an
agency is responsible. Id. at 314. Based on this interpretation, GAO
concluded that the activities of the Board’s Division of Information
were not improper. The only thing GAO found that might be
questionable, the decision noted, were certain press releases
reporting speeches of members of the Board.
Thus, 31 Comp. Gen. 311 established the important proposition that the
statute does not prohibit an agency’s legitimate informational
activities. See also B-319075, Apr. 23, 2010; B-302992, Sept. 10,
2004; B-302504, Mar. 10, 2004; B-284226.2, Aug. 17, 2000; B-223098.2,
Oct. 10, 1986. It also established that the publicity or propaganda
restriction prohibits “publicity of a nature tending to emphasize the
importance of the agency or activity in question.” 31 Comp. Gen. at
313. See also B-302504, Mar. 10, 2004; B-212069, Oct. 6, 1983.
Such activity has become known as “self-aggrandizement.”
Page 4-199 – Replace footnote number 121 with the following:
[121] Pub. L. No. 108-447, div. H, title VI, § 624, 118 Stat. 2809,
3278 (Dec. 8, 2004).
Page 4-200 – Replace the first full paragraph with the following:
In B-302504, Mar. 10, 2004, GAO considered a flyer and television and
print advertisements that the Department of Health and Human Services
(HHS) produced and distributed to inform Medicare beneficiaries of
recently enacted changes to the Medicare program. While the materials
had notable factual omissions and other weaknesses, GAO concluded that
the materials were not self-aggrandizement because they did not
attribute the enactment of new Medicare benefits to HHS or any of its
agencies or officials.
There was also no violation found in B-303495, Jan. 4, 2005, which was
affirmed in B-303495.2, Feb. 15, 2005. In this case, the Office of
National Drug Control Policy used the term “Drug Czar” to describe its
director in video news releases it issued under the Drug-Free Media
Campaign Act of 1998. The term had common, widespread, and long-
standing usage by the media and members of Congress, and was not being
used by the agency to persuade the public of the importance of the
director. Rather, it was used as “nothing more than a sobriquet.” B-
303495, at 15.
Page 4-200 – Replace the third full paragraph with the following:
Other cases, in which GAO specifically found no self-aggrandizement,
are B-320482, Oct. 19, 2010 (Department of Health and Human Services’
(HHS) contracts for technical assistance and production and airing of
a television advertisement); B-319834, Sept. 9, 2010 (HHS’s
preparation and distribution of a brochure informing Medicare
recipients about changes in Medicare); B-319075, Apr. 23, 2010 (HHS’s
creation and operation of its HealthReform.gov Web site and the State
Your Support Web page); B-284226.2, Aug. 17, 2000 (Department of
Housing and Urban Development report and accompanying letter providing
information to agency constituents about the impact of program
reductions being proposed in Congress); B-212069, Oct. 6, 1983 (press
release by Director of Office of Personnel Management excoriating
certain Members of Congress who wanted to delay a civil service
measure the administration supported); and B-161686, June 30, 1967
(State Department publications on Vietnam War). In none of these cases
were the materials designed to glorify the issuing agency or official.
Page 4-202 – Replace the first paragraph under the heading “(3) Covert
propaganda” with the following:
Another type of activity that GAO has construed as prohibited by the “
publicity or propaganda not authorized by Congress” statute is “covert
propaganda,” defined as “materials such as editorials or other
articles prepared by an agency or its contractors at the behest of the
agency and circulated as the ostensible position of parties outside
the agency.” B-229257, June 10, 1988. A critical element of the
violation is concealment from the target audience of the agency’s role
in sponsoring the material. Id.; B-305368, Sept. 30, 2005; B-304228,
Sept. 30, 2005; B-303495, Jan. 4, 2005; B-302710, May 19, 2004; B-
306349, Sept. 30, 2005 (nondecision letter).
Page 4-202 – Insert the following after the second full paragraph:
In B-302710, May 19, 2004, GAO found that the Department of Health and
Human Services (HHS) violated the prohibition when it produced and
distributed prepackaged video news stories that did not identify the
agency as the source of the news stories. Prepackaged news stories,
ordinarily contained in video news releases, or “VNRs,” have become a
popular tool in the public relations industry. The prepackaged news
stories may be accompanied by a suggested script, video clips known as
“B-roll” film which news organizations can use either to augment their
presentation of the prepackaged news story or to develop their own
news reports in place of the prepackaged story, and various other
promotional materials. These materials are produced in the same manner
in which television news organizations produce materials for their own
news segments, so they can be reproduced and presented as part of a
newscast by the news organizations. The HHS news stories were part of
a media campaign to inform Medicare recipients about new benefits
available under the recently enacted Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. HHS designed its
prepackaged video news stories to be indistinguishable from video
segments produced by private news broadcasters, allowing broadcasters
to incorporate them into their broadcasts without alteration. The
suggested anchor lead-in scripts included in the package facilitated
the unaltered use of the prepackaged news stories, announcing the
package as a news story by fictional news reporters. HHS, however, did
not include any statement in the news stories to advise the television
viewing audience, the target of the purported news stories, that the
agency wrote and produced the prepackaged news stories, and the
television viewing audiences did not know that the stories they
watched on television news programs about the government were, in
fact, prepared by the government. See also B-304228, Sept. 30, 2005
(prepackaged news story produced by consultant hired by the Department
of Education did not reveal to the target audience the Department’s
role so it was covert propaganda in violation of the prohibition); B-
303495, Jan. 4, 2005 (prepackaged news stories produced by the Office
of National Drug Control Policy were covert propaganda in violation of
the prohibition). Cf. B-307917, July 6, 2006 (newspaper article).
Page 4-202 – Replace the third full paragraph with the following:
A similar holding is 66 Comp. Gen. 707 (1987), involving newspaper
articles and editorials in support of Central American policy. The
materials were prepared by paid consultants at government request, and
published as the work of nongovernmental parties. The decision also
found that media visits by Nicaraguan opposition leaders, arranged by
government officials but with that fact concealed, constituted another
form of “covert propaganda.” See also B-305368, Sept. 30, 2005
(Department of Education contract with radio and television
personality to comment regularly on the No Child Left Behind Act
without assuring that the Department’s role was disclosed to the
targeted audiences violated the publicity and propaganda prohibition);
B-129874, Sept. 11, 1978 (“canned editorials” and sample letters to
the editor in support of Consumer Protection Agency legislation, had
they been prepared, would have violated the law); B-306349, Sept. 30,
2005 (nondecision letter) (Department of Education urged to review
newspaper article written by a Department of Education contractor
which did not disclose the agency’s involvement in its writing for
possible publicity or propaganda violations). Compare B-320482, Oct.
19, 2010 (a Department of Health and Human Services’s contract with an
economist for technical assistance did not violate the prohibition
since the economist acted on his own behalf in writing opinion pieces,
testifying, or otherwise speaking on health reform; HHS did not
contract for or have any involvement with these activities); B-316443,
July 21, 2009 (Department of Defense (DOD) outreach to retired
military officers (RMOs) who served as media analysts did not violate
the prohibition because there was no evidence that DOD attempted to
conceal its outreach from the public nor was there evidence that DOD
contracted with or paid RMOs for positive commentary or analysis); B-
304716, Sept. 30, 2005 (services provided by expert consultant hired
by the Department of Health and Human Services, Administration for
Children and Families (ACF), did not violate the publicity or
propaganda prohibition since the one published article prepared by the
consultant under the contract was published under the signature of the
assistant secretary of ACF and the contract did not call for the
consultant to write articles under her own name).
Page 4-202 – Insert the following after the last paragraph:
In B-302992, Sept. 10, 2004, the Forest Service produced video and
print materials to explain and defend its controversial land and
resource management plan for the Sierra Nevada Forest. Because the
video and print materials clearly identified the Forest Service and
the Department of Agriculture as the source of the materials, GAO
concluded that they did not constitute covert propaganda. See also B-
301022, Mar. 10, 2004 (the Office of National Drug Control Policy was
clearly identified as the source of materials sent to members of the
National District Attorneys Association concerning the debate over the
legalization of marijuana).
In reaction to the growing use of prepackaged news stories within the
government, GAO issued a circular letter to the heads of departments,
agencies, and others concerned entitled Prepackaged News Stories, B-
304272, Feb. 17, 2005. The letter fully explains the limitations
imposed by the publicity or propaganda prohibition on the use of
prepackaged news stories. It also explains when agencies are allowed
to use prepackaged news stories, noting in particular that such use is
valid so long as there is clear disclosure to the viewing audience
that the material presented was prepared by or in cooperation with a
government agency.
In May 2005, Congress enacted section 6076 of the Emergency
Supplemental Appropriations Act for Defense, the Global War on Terror,
and Tsunami Relief, 2005, Pub. L. No. 109-13, 110 Stat. 231, 301 (May
11, 2005). Section 6076 provided that no appropriations “may be used
by an executive branch agency to produce any prepackaged news story
intended for broadcast or distribution unless the story includes a
clear notification within the text or audio of the prepackaged news
story that the prepackaged news story was prepared or funded by that
executive branch agency.” Id. In the conference report submitted to
both houses of Congress the conferees specifically noted GAO’s
analysis of covert propaganda and stated that section 6076 “confirms
the opinion of the Government Accountability Office dated February 17,
2005 (B-304272).” H.R. Conf. Rep. No. 109-72, at 158–59 (2005)
(emphasis added). The opinion to which the report was referring was
the Comptroller General’s circular letter which clearly stated that
the critical element in determining whether prepackaged news stories
constitute covert propaganda is whether the intended audience is
informed of the source of the materials. B-304272, Feb.
17, 2005. Inasmuch as section 6076 “confirms” GAO’s opinion, the
section did not create new law or impose a new requirement. “Congress
enacted section 6076 to emphasize that the publicity or propaganda
prohibition always restricted the use of appropriations to disseminate
information without proper source attribution.” B-307917, July 6,
2006, at 2 (concerning newspaper article without source attribution
that agency contracted for before passage of section 6076). Therefore,
transactions entered into before the date of enactment of section 6076
are held to the same requirement for source attribution. Id.
(4) Purely partisan materials:
A third category of materials identified in GAO case law as violating
the publicity or propaganda prohibition is purely partisan materials.
To be characterized as purely partisan in nature, the offending
materials must be found to have been “designed to aid a political
party or candidate.” B-147578, Nov. 8, 1962. It is axiomatic that
funds appropriated to carry out a particular program would not be
available for political purposes. See B-147578, Nov. 8, 1962.
It is often difficult to determine whether materials are political or
not because “the lines separating the nonpolitical from the political
cannot be precisely drawn.” Id.; B-144323, Nov. 4, 1960. See also B-
130961, Oct. 26, 1972. An agency has a legitimate right to explain and
defend its policies and respond to attacks on that policy. B-319834,
Sept. 9, 2010; B-319075, Apr. 23, 2010; B-302504, Mar. 10, 2004. A
standard GAO applies is that the use of appropriated funds is improper
only if the activity is “completely devoid of any connection with
official functions.” B-322882, Nov. 8, 2012. B-147578, Nov. 8, 1962.
As stated in B-144323, Nov. 4, 1960:
“The question is whether in any particular case a speech or a release
by a cabinet officer can be said to be so completely devoid of any
connection with official functions or so political in nature that it
is not in furtherance of the purpose for which Government funds were
appropriated, thereby making the use of such funds ... unauthorized.
This is extremely difficult to determine in most cases as the lines
separating the nonpolitical from the political cannot be precisely
drawn.
“... As a practical matter, even if we were to conclude that the use
of appropriated funds for any given speech or its release was
unauthorized, the amount involved would be small, and difficult to
ascertain; and the results of any corrective action might well be
more technical than real.”
While GAO has reviewed materials to determine whether they are
partisan in nature, to date there are no opinions or decisions of the
Comptroller General concluding that an agency’s informational
materials were so purely partisan as to constitute impermissible
publicity or propaganda. In 2000, GAO concluded that an information
campaign by the Department of Housing and Urban Development (HUD)
using a widely disseminated publication, entitled Losing Ground: The
Impact of Proposed HUD Budget Cuts on America’s Communities, had not
violated the prohibition. B-284226.2, Aug. 17, 2000. In the
publication, HUD criticized what it called “deep cuts” in
appropriations that were proposed by the House Appropriations
Committee for particular HUD programs. The publications stated that,
if enacted, the “cuts would have a devastating impact on families and
communities nationwide.” GAO found that this publication was a
legitimate exercise of HUD’s duty to inform the public of government
policies, and that HUD had a right to justify its policies to the
public and rebut attacks against those policies.
In B-302504, Mar. 10, 2004, GAO examined a flyer and print and
television advertisements about changes to Medicare enacted by the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003, Pub. L. No. 108-173, 117 Stat. 2066 (Dec. 8, 2003). The flyer
contained information about new prescription drug benefits and price
discount cards. GAO noted that while the materials contained opinion
and notable factual omissions, the materials did not constitute
impermissible publicity or propaganda. GAO explained:
“To restrict all materials that have some political content or express
support of an Administration’s policies would significantly curtail
the recognized and legitimate exercise of the Administration’s authority
to inform the public of its policies, to justify its policies and to
rebut attacks on its policies. It is important for the public to
understand the philosophical underpinnings of the policies advanced
by elected officials and their staff in order for the public to
evaluate and form opinions on those policies.”
B-302504, at 10. See also B-320482, Oct. 19, 2010 (Department of
Health and Human Services’ (HHS) television advertisement describing
changes to Medicare are not purely partisan despite some overstatement
of the benefits); B-319834, Sept. 9, 2010 (although an HHS brochure
contained instances in which HHS presented abbreviated information and
a positive view of recent changes to Medicare that are not universally
shared, nothing in the brochure constituted communication that is
purely partisan); B-319075, Apr. 23, 2010 (while HHS’s
HealthReform.gov Web site and State Your Support Web page contained
statements that may be characterized as having political content, GAO
found no statements that are purely partisan).
In B-302992, Sept. 10, 2004, GAO upheld the Forest Service’s right to
produce and distribute a brochure and video materials regarding its
controversial policy on managing wildfire in the Sierra Nevada Forest.
Because the materials sought to explain hundreds of pages of
scientific data, official opinions, and documents of the Forest
Service, they were not comprehensive and did not explain all the
positive and negative aspects of the thinning policies adopted in its
regional forest plan. GAO concluded that the Forest Service had the
authority to disseminate information about its programs and policies
and to defend those policies.
In B-322882, Nov. 8, 2012, GAO reviewed an e-mail written by a
Consumer Product Safety Commission staff member to a swimming pool
industry representative. The e-mail encouraged the recipient to
contact nine Members of Congress belonging to the same political party
who supported a change in a Commission interpretive rule. The staffer
explained that hearing from the industry representative may provide
the Members of Congress “some insight into the safety of the current
[before the revised rule] system.” GAO acknowledged that encouraging a
person to contact Members of Congress of a single political party “may
imbue the [e-mail] with a subtle political tone.” However, the
publicity or propaganda prohibition “does not bar materials that may
have some political content or express support for a particular view.”
Moreover, an e-mail is not purely partisan solely because it fails to
present a balanced view of the consequences of agency action. Because
the e-mail purported to facilitate an exchange of information
regarding pool safety, the staff member’s e-mail was not completely
devoid of official functions and therefore did not violate the
prohibition.
Apart from considerations of whether any particular law has been
violated, GAO has taken the position in two audit reports that the
government should not disseminate misleading information. In 1976, the
former Energy Research and Development Administration (ERDA) published
a pamphlet entitled Shedding Light On Facts About Nuclear Energy.
Ostensibly created as part of an employee motivational program, ERDA
printed copies of the pamphlet far in excess of any legitimate program
needs, and inundated the state of California with them in the months
preceding a nuclear safeguards initiative vote in that state. While
the pamphlet had a strong pro-nuclear bias and urged the reader to
“Let your voice be heard,” the pamphlet did not violate any anti-
lobbying statute because applicable restrictions did not extend to
lobbying at the state level. B-130961-O.M., Sept. 10, 1976. However,
GAO’s review of the pamphlet found it to be oversimplified and
misleading. GAO characterized it as propaganda not suitable for
distribution to anyone, employees or otherwise, and recommended that
ERDA cease further distribution and recover and destroy any
undistributed copies. See GAO, Evaluation Of the Publication and
Distribution Of “Shedding Light On Facts About Nuclear Energy,” EMD-76-
12 (Washington, D.C.: Sept. 30, 1976).
In a later report, GAO reviewed a number of publications related to
the Clinch River Breeder Reactor Project, a cooperative
government/industry demonstration project, and found several of them
to be oversimplified and distorted propaganda, and as such
questionable for distribution to the public. However, the publications
were produced by the private sector components of the Project and paid
for with utility industry contributions and not with federal funds.
GAO recommended that the Department of Energy work with the private
sector components in an effort to eliminate this kind of material, or
at the very least ensure that such publications include a prominently
displayed disclaimer statement making it clear that the material was
not government approved. GAO, Problems With Publications Related To
The Clinch River Breeder Reactor Project, EMD-77-74 (Washington, D.C.:
Jan. 6, 1978).
Page 4-203 – Renumber section (4) as follows:
(5) Pending legislation: Overview:
Page 4-205 – Replace the second full paragraph with the following and
insert a reference to new footnote number 129a as follows:
The Comptroller General has construed the “pending legislation”
provisions as applying primarily to indirect or “grassroots”
lobbying129a and not to direct contact with Members of Congress. In
other words, the statute prohibits appeals to members of the public
suggesting that they in turn contact their elected representatives to
indicate support of or opposition to pending legislation, thereby
expressly or implicitly urging the legislators to vote in a particular
manner. GAO and the Justice Department have interpreted the
traditional prohibition (“publicity or propaganda purposes designed to
support or defeat pending legislation”) to require an overt appeal to
the public. B-270875, July 5, 1996.
Page 4-205 – Insert the following as new footnote number 129a:
[129a] Therefore, where an e-mail encouraging the recipient to contact
Members of Congress regarding an interpretive rule change of the
Consumer Product Safety Commission did not concern pending
legislation, the subject e-mail did not constitute grassroots lobbying
as prohibited by an appropriations restriction. B-322882, Nov. 8, 2012.
Page 4-207 – Renumber section (5) as follows:
(6) Cases involving “grassroots” lobbying violations:
Page 4-210 – Renumber section (6) as follows:
(7) Pending legislation: Cases in which no violation was found Page 4-
212 – Insert the following after the first paragraph:
In another case, the Social Security Administration (SSA), in its
annual mailing of employment benefit reports to American workers,
included material concerning the Social Security system’s potential
financial problems and legislative initiatives to reform the Social
Security program. Since none of the material called on the public to
contact Congress and urge it to support SSA’s position on this or any
other matter, GAO determined that there was no violation of the
grassroots lobbying prohibition. GAO rejected the suggestion that the
standard ought to be an assessment of the agency’s intent and whether
the agency’s message would be likely to influence the public to
contact Congress. The standard requiring evidence of a clear appeal by
the agency to the public to contact congressional members to urge them
to support the agency’s position is based upon the language and
legislative history of the grassroots lobbying provisions. Moreover,
the standard is consistent with a proper respect for the right and
responsibility of federal agencies to communicate with the public and
Congress regarding policies and activities. GAO stated:
B-304715, Apr. 27, 2005. See also B-319075, Apr. 23, 2010 (GAO’s
review of the Department of Health and Human Service’s
HealthReform.gov Web site, State Your Support Web page, and materials
regarding subsequent contacts with Web users found no explicit or
direct appeal to the public to contact Members of Congress in support
of pending legislation).
Page 4-213 – Renumber section (7) as follows:
(8) Pending legislation: Providing assistance to private lobbying
groups.
Page 4-215 – Renumber section (8) as follows:
(9) Promotion of legislative proposals: Prohibited activity short of
grass roots lobbying:
Pages 4-218 to 4-219 – Delete the entire section (9) entitled
“Dissemination of political or misleading information”; the
information contained therein has been integrated into the new section “
(4) Purely partisan materials,” above.
Page 4-219 – Insert the following after the third paragraph as a new
section 11.c.(10):
(10) Federal employees’ communications with Congress Since 1998,
annual appropriations acts each year have contained a governmentwide
prohibition on the use of appropriated funds to pay the salary of any
federal official who prohibits or prevents another federal employee
from communicating with Congress. See Pub. L. No. 105-61, § 640, 111
Stat. 1272, 1318 (Oct. 10, 1997). Specifically, this provision states:
“No part of any appropriation contained in this or any other Act shall
be available for the payment of the salary of any officer or employee
of the Federal Government, who ... prohibits or prevents, or attempts
or threatens to prohibit or prevent, any other officer or employee of
the Federal Government from having any direct oral or written
communication or contact with any Member, committee, or subcommittee
of the Congress in connection with any matter pertaining to the
employment of such other officer or employee or pertaining to the
department or agency of such other officer or employee in any way,
irrespective of whether such communication or contact is at the
initiative of such other officer or employee or in response to the
request or inquiry of such Member, committee, or subcommittee.”
Pub. L. No. 108-199, div. F, title VI, § 618, 188 Stat. 3, 354 (Jan.
23, 2004); see also Pub. L. No. 108-7, div. J, title VI, § 620, 117
Stat. 11, 468 (Feb. 20, 2003). This provision has its antecedents in
several older pieces of legislation, including section 6 of the Lloyd-
La Follette Act of 1912, Pub. L. No. 336, ch. 389, 66 Stat. 539, 540
(Aug. 24, 1912), which stated: “The right of persons employed in the
civil service of the United States, either individually or
collectively, to petition Congress, or any Member thereof, or to
furnish information to either House of Congress, or to any committee
or member thereof, shall not be denied or interfered with.”
Congress enacted section 6 in response to concern over executive
orders by Presidents Theodore Roosevelt and Howard Taft that
prohibited federal employees from contacting Congress except through
the head of their agency. The legislative history of this provision
indicates that Congress intended to advance two goals: to preserve the
First Amendment rights of federal employees regarding their working
conditions and to ensure that Congress had access to programmatic
information from frontline federal employees. See H.R. Rep. No. 62-
388, at 7 (1912); 48 Cong. Rec. 5634, 10673 (1912).
In B-302911, Sept. 7, 2004, GAO concluded that the Department of
Health and Human Services violated this provision by paying the salary
of the Director of the Centers for Medicare & Medicaid Services (CMS)
who prohibited the CMS Chief Actuary from providing certain cost
estimates of Medicare legislation to Congress. The Director
specifically instructed the Chief Actuary not to respond to any
requests for information and advised that there would be adverse
consequences if he released any information to Congress. GAO
recognized that certain applications of the provision could raise
constitutional separation of powers concerns; however, there was no
controlling judicial opinion declaring the provision unconstitutional.
GAO found that the provision, as applied to the facts in this case,
precluded the payment of the CMS Director’s salary because he
specifically prevented another employee from communicating with
Congress, particularly in light of the narrow, technical nature of the
information requested by Congress and Congress’s need for the
information in carrying out its constitutional legislative duties.
Page 4-221 – Replace the first full paragraph with the following,
including the reference to new footnote number 138a:
GAO has addressed the application of the Byrd Amendment to federal
contractors in the context of bid protests. See, e.g., 71 Comp. Gen.
281 (1992) (communication between bidder’s “regularly employed”
employee and government engineer was not an attempt to influence
procuring agency in connection with a federal contract and therefore
did not violate the Byrd Amendment); 71 Comp. Gen. 81 (1991) (Byrd
Amendment does not require disclosure of reasonable compensation to
regularly employed employees); 69 Comp. Gen. 604 (1990) (contractor
lobbying activity was not directed at award of current contract and
therefore was not required to be disclosed under the Byrd Amendment);
B-246304.8, B-246304.9, May 4, 1993 (bidder’s lobbying to have
legislation changed, regardless of how funded, did not violate the
Byrd Amendment). GAO has had one occasion to consider the Byrd Amendment
’s application to federal grant recipients in a case involving the
Denali Commission. B-317821, June 30, 2009. Some Denali Commissioners
are also officials of organizations who receive federal grants from
the agency or whose members receive federal grants. GAO determined
that the Byrd Amendment prohibits Commissioners and their personal
staff, when acting in their role as grantees, from using grant funds
to lobby Members of Congress and their staff in connection with the
making of a grant.[Footnote 138a] Id.
Page 4-221 – Insert the following as new footnote number 138a:
[138a] The decision in B-317821 notes, however, that the Byrd
Amendment does not apply when Commissioners are acting in their role
as commissioners. In that instance, anti-lobbying restrictions apply
(see the anti-lobbying discussion in section C.11.c of this chapter).
Page 4-221 – Replace footnote number 139 with the following:
[139] Pub. L. No. 104-65, 109 Stat. 691 (Dec. 19, 1995). For a
discussion of the constitutionality of the Byrd Amendment in the grant
context after passage of Public Law 104-65, see United States v.
National Training & Information Center, 532 F. Supp. 2d 946 (N.D. Ill.
2007).
Page 4-227 – Replace the third full paragraph with the following:
A 1983 decision illustrates another form of information dissemination
that is permissible without the need for specific statutory support.
Military chaplains are required to hold religious services for the
commands to which they are assigned. 10 U.S.C. § 3547. Publicizing
such information as the schedule of services and the names and
telephone numbers of installation chaplains is an appropriate
extension of this duty. Thus, GAO advised the Army that it could
procure and distribute calendars on which this information was
printed. 62 Comp. Gen. 566 (1983). Applying a similar rationale, the
decision also held that information on the Community Services program,
which provides various social services for military personnel and
their families, could be included. See also B-301367, Oct.
23, 2003 (affixing decals of the major units assigned to an Air Force
base onto a nearby utility company water tower to inform the public of
military activity in the area is a permissible use of appropriated
funds); B-290900, Mar. 18, 2003 (approving the Bureau of Land
Management’s use of appropriated funds to pay its share of the costs
of disseminating information under a cooperative agreement); B-280440,
Feb. 26, 1999 (allowing the Border Patrol’s use of appropriated funds
to purchase uniform medals that, in part, served to advance “knowledge
and appreciation for the agency’s history and mission”).
Page 4-232 – Replace the first full paragraph with the following:
A statute originally enacted in 1913, now found at 5 U.S.C. § 3107,
provides: “Appropriated funds may not be used to pay a publicity
expert unless specifically appropriated for that purpose.” This
provision applies to all appropriated funds. GAO has consistently
noted certain difficulties in enforcing the statute. In GAO’s first
substantive discussion of 5 U.S.C. § 3107, the Comptroller General
stated “in its present form, the statute is ineffective.” A-61553, May
10, 1935. The early cases151 identified three problem areas,
summarized in B-181254(2), Feb. 28, 1975.
Page 4-233 – Insert the following after the second paragraph:
The legislative history of section 3107 provides some illumination.
While it is not clear what was meant by “publicity expert,” there are
indications that the provision would prohibit the use of press agents
“to extol or to advertise” the agency or individuals within the
agency. See, e.g., 50 Cong. Rec. 4410 (1913) (comments of
Representative Fitzgerald, chairman of the committee that reported the
bill). There are also indications that the provision should not
interfere with legitimate information dissemination regarding agency
work or services. When some members expressed concern that the
provision may affect the hiring of experts to “make our farm bulletins
more readable to the public and more practical in their make-up,”
supporters indicated that such activities would not be restricted by
passage of the provision. Id. at 4410 (colloquy between
Representatives Lever and Fitzgerald).
Page 4-234 – Insert the following after the first partial paragraph:
GAO revisited the statute in B-302992, Sept. 10, 2004. The Forest
Service had hired a public relations firm to help produce and
distribute materials regarding its controversial land and resource
management plan in the Sierra Nevada Forest, a plan consisting of
hundreds of pages of scientific data and opinions. The Forest Service
had hired the public relations firm to help make the plan’s scientific
content more understandable to the public and media. GAO concluded
that the Forest Service had not violated section 3107. GAO said that
section 3107 was not intended to impede legitimate informational
functions of agencies and does not prohibit agencies from paying press
agents and public affairs officers to facilitate and manage
dissemination of agency information. GAO stated: “Instead, what
Congress intended to prohibit with section 3107 is paying an
individual ‘to extol or to advertise’ the agency, an activity quite
different from disseminating information to the citizenry about the
agency, its policies, practices, and products.” B-302992, Sept. 10,
2004.
In 2005, GAO considered whether the Social Security Administration’s
(SSA) use of the Gallup Organization to poll the public on Social
Security program issues violated 5 U.S.C. § 3107. Citing to the
discussion of the legislative history of section 3107 in B-302992,
Sept. 10, 2004, GAO determined that SSA did not hire Gallup to—nor did
Gallup in fact—extol or advertise SSA or individuals within SSA.
Rather, SSA hired Gallup to engage in the legitimate agency activity
of collecting information that the agency needed in order to carry out
its Social Security program. SSA’s authority to survey the general
public on its knowledge of the Social Security program and programs
financing is inherent in the agency’s authority to administer that
program, 42 U.S.C. § 901(b). Since Gallup was assisting SSA in this
endeavor, Gallup was not a “publicity expert” within the meaning of
section 3107. B-305349, Dec. 20, 2005.
12. Membership Fees:
Page 4-234 – Replace the first full paragraph with the following and
insert new footnote number 152a as follows:
Appropriated funds may not be used to pay membership fees of an
employee of the United States in a society or association. 5 U.S.C. §
5946. The prohibition does not apply if an appropriation is expressly
available for that purpose, or if the fee is authorized under the
Government Employees Training Act. Under the Training Act, membership
fees may be paid if the fee is a necessary cost directly related to
the training or a condition precedent to undergoing the training. 5
U.S.C. § 4109(b).[Footnote 152a]
Page 4-234 – Insert the following for new footnote number 152a:
[152a] The District of Columbia has specifically exempted its
employees from the provisions of 5 U.S.C. § 5946 as well as the
Government Employees Training Act, 5 U.S.C. ch. 41. See D.C.
Official Code, 2001 ed. § 1-632.02.
Page 4-236 – Replace the first full paragraph with the following:
As noted, an agency may purchase membership in its own name in a
society or association since 5 U.S.C. § 5946 prohibits only
memberships for individual employees. The distinction, however, is not
a distinction in name only. An expenditure for an agency membership
must be justified on a “necessary expense” theory. To do this, the
membership must provide benefits to the agency itself. For example, in
31 Comp. Gen. 398 (1952), the Economic Stabilization Agency was
permitted to become a member of a credit association because members
could purchase credit reports at reduced cost and the procurement of
credit reports was determined to be necessary to the enforcement of
the Defense Production Act. In 33 Comp. Gen. 126 (1953), the Office of
Technical Services, Commerce Department, was permitted to purchase
membership in the American Management Association. The appropriation
involved was an appropriation under the Mutual Security Act to conduct
programs including technical assistance to Europe, and the membership
benefit to the agency was the procurement of Association publications
for foreign trainees and foreign productivity centers. See also B-
305095, Dec. 8, 2005 (the United States Chemical Safety and Hazard
Investigation Board appropriation is available to pay the membership
fee for the Board to become a corporate associate member of the Risk
Management and Decision Processes Center of the Wharton School,
University of Pennsylvania, since the Board has determined that such
membership will assist the Board in carrying out its duties under 42
U.S.C. § 7412(r)(6)); 70 Comp. Gen. 190 (1991) (prohibition in 5
U.S.C. § 5946 does not prohibit an agency from using appropriated
funds to purchase access for its employees to a private fitness center’
s exercise facilities as part of the agency’s health service program
as authorized by 5 U.S.C. § 7901); B-241706, June 19, 1991 (Public
Health Service may reimburse physicians for annual medical staff dues
since hospital privileges are essential to the performance of the agency
’s business); B-236763, Jan. 10, 1990 (GAO may pay fees for agency
membership in certain professional organizations and designate
appropriate GAO employees to attend functions for recruitment
purposes).
Page 4-239 – Replace the second paragraph with the following:
Compare that case with the decision in B-286026, June 12, 2001, in
which the Pension Benefit Guaranty Corporation (PBGC) asked whether it
could use appropriated funds to pay, as training costs, fees for
actuary accreditation. PBGC employs a number of actuaries to calculate
pension benefits. Although actuaries do not need a professional
license for employment, as part of a collective bargaining agreement
PBGC proposed to use training funds to send actuaries to the
examination review courses, provide on-the-job study time, and pay for
the accreditation examinations. PBGC determined that this course of
study and testing would enhance the ability of the PBGC actuaries to
carry out their assignments. PBGC has the discretion under the
Government Employees Training Act to determine that the review courses
constitute appropriate training for its actuaries. Accordingly, GAO
agreed that PBGC has authority, under 5 U.S.C. § 4109(a), to use
appropriated funds for review courses and on-the-job study time.
However, there was no authority to pay the cost of the accreditation
examination itself, since a licensing accreditation examination does
not fall within the Government Employees Training Act’s definition of
training. In the absence of statutory authority, an agency may not pay
the costs of its employees taking licensing examinations since
professional accreditation is personal to the employee and should be
paid with personal funds. Here, the actuarial accreditation belongs to
the employee personally and would remain so irrespective of whether
the employee remains with the federal government.
The PBGC decision, B-286026, June 12, 2001, predated enactment of 5
U.S.C. § 5757, which gave agencies the discretionary authority to
reimburse employees for expenses incurred in obtaining professional
credentials, including the costs of examinations. In B-302548, Aug.
20, 2004, GAO determined that under 5 U.S.C. § 5757, an agency may pay
only the expenses required to obtain the license or official
certification needed to practice a particular profession. In that
case, an employee who was a certified public accountant (CPA) asked
her agency to pay for her membership in the California Society of
Certified Public Accountants, which is voluntary and not a
prerequisite for obtaining a CPA license in California. GAO held that
payment for voluntary memberships in organizations of already
credentialed professionals is prohibited under 5 U.S.C. § 5946, and
section 5757 does not provide any authority to pay such fees where the
membership in the organization is not a prerequisite to obtaining the
professional credential. Section 5757 is discussed in more detail in
this chapter in the next section on attorneys’ expenses related to
admission to the bar, and in section C.13.e on professional
qualification expenses.
Page 4-242 – Replace the first paragraph with the following:
In 2001, section 1112 of the National Defense Authorization Act for
Fiscal Year 2002, Pub. L. No. 107-107, 115 Stat. 1238 (Dec. 28, 2001)
amended title 5, United States Code, by adding a new section 5757.
Under 5 U.S.C. § 5757(a), agencies may, at their discretion, use
appropriated funds to pay expenses incurred by employees to obtain
professional credentials, state-imposed and professional licenses,
professional accreditations, and professional certifications,
including the costs of examinations to obtain such credentials. This
authority is not available to pay such fees for employees in or
seeking to be hired into positions excepted from the competitive
service because of the confidential, policy-determining, policymaking,
or policy-advocating character of the position. 5 U.S.C. § 5757(b).
Nothing in the statute or its legislative history defines or limits
the terms “professional credentials,” “professional accreditation,” or
“professional certification.” Agencies have the discretion to
determine whether resources permit payment of credentials, and what
types of professional expenses will be paid under the statute. Thus,
if an agency determines that the fees its attorneys must pay for
admission to practice before federal courts are in the nature of
professional credentials or certifications, the agency may exercise
its discretion under 5 U.S.C. § 5757 and pay those fees out of
appropriated funds. B-289219, Oct. 29, 2002.
Also, GAO has stated that under 5 U.S.C. § 5757 an agency may pay the
expenses of employees’ memberships in state bar associations when
membership is required to maintain their licenses to practice law. See
B-302548, Aug. 20, 2004 (note that this decision concerned membership
in a certified public accountants’ (CPA) professional organization
that was not required as a condition of the CPA license).
13. Personal Expenses and Furnishings:
Page 4-250 – Insert the following after the second full paragraph:
The cost of employee health insurance is also a personal expense and,
therefore, must be borne by the employee unless there is statutory
authority permitting the government to pay. In the Federal Employees
Health Benefits Act of 1959, Congress established a health benefits
program to provide health insurance for federal employees and other
beneficiaries. The government’s contribution is paid from
appropriations available to the employing agency. 5 U.S.C. § 8906(f).
Appropriations are not available, however, to reimburse an employee
for the cost of purchasing health insurance outside of the authorized
health benefits program. B-323449, Aug. 14, 2012.
Page 4-253 – Replace the third paragraph with the following:
Another related line of decisions addresses the purchase of bottled
drinking water for use in federal work facilities where the safety of
municipal or locally provided water is at issue. Generally,
appropriated funds are not available to pay for bottled water for the
personal use of employees. GAO has made an exception where a building’
s water supply is unhealthy or unpotable. See, for example, B-247871,
Apr. 10, 1992, where a problem with the water supply system in a
building caused lead content to exceed the maximum contaminant level
and justified the purchase of bottled water for employees until the
problems with the system could be resolved. Compare B-303920, Mar. 21,
2006 (relief denied to certifying officer who improperly approved
payments for bottled water for employees where there was no evidence
that drinking water in the building was unhealthy). For remote work
sites that have no access to potable water, GAO has also determined
that it is within the agency’s discretion to decide how best to
provide its employees with access to potable water, whether by
providing coolers or jugs for transporting water or by providing
bottled water. B-310502, Feb. 4, 2008. See also B-318588, Sept. 29,
2009.
Page 4-253 – Insert the following after the third paragraph, including
the reference to new footnote number 161a, as follows:
The U.S. Court of Appeals for the District of Columbia Circuit
addressed the issue of bottled water for federal employees in January
2012. Navy v. Federal Labor Relations Authority, 665 F.3d 1339 (D.C.
Cir. 2012). The Navy asked the court to review a decision by the
Federal Labor Relations Authority (FLRA), which held that the Navy had
a duty to bargain with unions before it stopped providing bottled
water to employees. The Navy had previously provided bottled water at
facilities in Rhode Island in the mid-1990s after discovering the
water fountains had lead components. The Navy replaced the water
fountains with lead-free models in 2005 and, after determining the tap
water was safe to drink, stopped providing bottled water in 2006.
The court cited the U.S. Constitution, federal statutes and case law,
and decisions and opinions of the Comptroller General to explain that
public funds may only be expended pursuant to appropriations made by
law. The court held that an agency’s responsibilities under federal
collective bargaining law are thus constrained by the limits imposed
by federal appropriations law. The court emphasized that the
Comptroller General has stated time and time again that the purchase
of bottled water for employees may violate the purpose statute, 31
U.S.C. § 1301, unless safe drinking water is not otherwise
available.161a Thus, the court concluded: “if the tap water at the
Newport facilities is safe and drinkable, the purchase of bottled
water with appropriated funds would violate federal appropriations law—
and the Navy would have no authority or duty to bargain with the
unions before discontinuing the provision of free bottled water.” 665
F.3d at 1351.
Page 4-253 – Insert the following as new footnote number 161a:
[161a] Citing to Comptroller General case law, the court referred to
GAO’s necessary expense doctrine. It viewed the assessment of GAO as “
an expert opinion” that it “should prudently consider.” 665 F.3d at
1349.
Page 4-256 – Insert the following after the second paragraph:
In another case, the cost of local lodging was not considered a
reasonable accommodation under the Rehabilitation Act. B-318229, Dec.
22, 2009. An employee who suffered from chronic lower back pain, a
condition that made it very difficult for the employee to sit for long
periods of time, had to travel to local work sites within the local
travel area of the employee’s official duty station. The employee
asked for reimbursement for lodging near the work sites to minimize
the time driving back and forth from the employee’s home, where the
employee teleworked, to the work sites. GAO pointed out that there is,
however, a statutory limitation on local lodging, and that this travel
is more akin to a commute, which is not covered by the Rehabilitation
Act. GAO concluded that the agency’s appropriations were not available
to pay for local lodging as a reasonable accommodation under the
Rehabilitation Act, and suggested that the agency consider other
available accommodations that would not require the employee to drive
and that would not require the agency to circumvent statutory lodging
limitations. Id.
Page 4-259 – Insert the following before the last paragraph:
A different type of situation arose in B-307316, Sept. 7, 2006. An
Army captain held dual citizenship with the United States and with
Turkey. In order to obtain a security clearance required for his
assignment to the United States Army Center for Health Promotion and
Preventive Medicine (Army Center), he had to renounce his Turkish
citizenship. GAO determined that the expenses incurred for the
renunciation of Turkish citizenship in order to obtain the security
clearance were primarily for the benefit of the government since the
required security clearance provided assurance to the government that
sensitive information will be safe and the renunciation facilitated
the granting of the clearance. Any personal benefit the captain would
receive from the renunciation was incidental to the performance of his
duties. Therefore, the Army Center could reimburse the captain for the
renunciation expenses.
Page 4-260 – Replace the first paragraph with the following:
Neither the statute nor its legislative history defines the terms “
professional credentials,” “professional accreditation,” and “
professional certification.” The statute and the 1994 decision
together appear to cover many, if not most, qualification expenses
that GAO previously found to be personal to the employee, including
actuarial accreditation (B-286026, June 12, 2001), licenses to
practice medicine (B-277033, June 27, 1997), a Certified Government
Financial Manager designation (B-260771, Oct. 11, 1995), and
professional engineering certificates (B-248955, July 24, 1992). See
also B-302548, Aug. 20, 2004 (certified public accountant fees) and
section C.12.b of this chapter for a discussion of attorneys’ bar
membership fees.
Page 4-264 – Replace the last partial paragraph with the following:
In 56 Comp. Gen. 81 (1976), the rationale of these cases was extended
to Armed Forces change of command ceremonies. The decision held that
the cost of printing invitations to a change of command ceremony for a
Coast Guard vessel could be paid from the Coast Guard’s appropriations
for operating expenses. In view of the traditional role of change of
command ceremonies in the military, the Comptroller General concluded
that the invitations were not inherently personal. (The case was
therefore distinguishable from the decisions previously discussed
prohibiting the use of public funds for greeting cards.) In another
case, the expenditure of official reception and representation (OR&R)
funds for costs of a change of command reception were determined to be
payable from OR&R funds because the reception met the prerequisites
for an “official reception for an incoming commander.” 69 Comp. Gen.
242 (1990). (See section C.5 of this chapter for a more general
discussion of related subject matter.)
Page 4-272 – Insert the following, including the reference to new
footnote number 166a, after the first partial paragraph:
As a general rule, then, employees must bear the costs of
transportation between their residences and official duty locations,
even when unusual conditions may increase commuting costs. 60
Comp. Gen. 633, 635 (1981). Congress has authorized agencies to use
appropriations for “the maintenance, operation, or repair of any
passenger carrier,” but “only to the extent that such carrier is used
to provide transportation for official purposes.” 31 U.S.C. §
1344(a)(1). It has specified that “transporting any individual ...
between such individual’s residence and such individual’s place of
employment is not transportation for an official purpose.” Id.
For example, in B-305864, Jan. 5, 2006, GAO held that the United
States Capitol Police (USCP) could not use appropriated funds for a
shuttle bus service from its parking lot to a new USCP facility or any
other USCP building, where the only purpose of the shuttle service is
to facilitate the commutes of USCP employees. The employee’s arrival
at the parking lot is viewed as an intermediate stop—like a subway or
bus stop—within the totality of the commute from home to office.
Therefore, the trip from the parking lot to the new USCP facility is
part of the employee’s commute and a personal expense. GAO noted that
there would be no objection to the use of appropriated funds for a
shuttle bus from USCP headquarters to the new facility and other USCP
buildings, so long as USCP established a legitimate operational need
to shuttle persons among those buildings and its purpose is not to aid
employees’ commutes. If USCP established a legitimate operational need
for shuttle service among USCP buildings, there would also be no
objection to any incidental use of the service by USCP employees to
complete their home-to-work commutes, provided, of course, that there
is no additional expenditure of time or money by the government in
order to accommodate these riders. B-305864. See also B-320116, Sept.
15, 2010 (appropriations are not available to pay for vehicle battery
recharging stations for the privately owned hybrid or electric
vehicles of employees or Members of Congress without legislative
authority; recharging stations would facilitate commuting between home
and work, which is a personal expense); B-318229, Dec. 22, 2009
(agency appropriations were not available to pay for local lodging as
a reasonable accommodation under the Rehabilitation Act since the
local travel was more akin to a commute, which is not covered by the
act).
Although generally agencies may not pay commuting costs, agencies may
exercise administrative discretion and provide transportation on a
temporary basis when there is a clear and present danger to government
employees or an emergency threatens the performance of vital
government functions. 62 Comp. Gen. 438, 445 (1983). Under 31 U.S.C. §
1344(b)(9), an agency may provide for home-to-work transportation for
an employee if the agency head determines that “highly unusual
circumstances present a clear and present danger, that an emergency
exists, or that other compelling operational considerations make such
transportation essential to the conduct of official business.” Section
1344(b)(9) also stipulates, however, that exceptions granted under it
must be “in accordance with” 31 U.S.C. § 1344(d), which limits
emergency exceptions to periods of up to 15 calendar days, subject to
periodic renewal for up to a total of 180 additional calendar days,
under specified detailed procedures.166a
GAO had occasion to consider the provisions in 31 U.S.C. § 1344 in
B-307918, Dec. 20, 2006. The National Logistic Support Center (NLSC)
was created by the National Oceanic and Atmospheric Administration to
maintain a stockpile warehouse and ship replacement parts and
equipment crucial to ensuring the proper functioning of equipment in
the weather forecasting stations across the country. Since NLSC
receives between 200 and 400 requests each year for emergency service
outside of normal office hours, NLSC schedules employees to attend to
these emergency, after-hours service requests on an “on-call” basis.
When NLSC receives a request for after-hours emergency service, it
notifies the on-call employees who return from their homes to their
NLSC offices to respond to the requests, prepare the required parts
for shipment to the affected weather station, deliver them to the
shipping vendor, and return home. GAO determined that the prohibition
in 31 U.S.C. § 1344(a)(1) precluded NLSC from using appropriated funds
to reimburse its employees for the mileage between their residences
and their NLSC offices since the statute precludes the payment of
commuting expenses regardless of whether it is incident to a regular
work schedule or the on-call work schedule described here. The
emergency exception recognized in 31 U.S.C. §§ 1344(b)(9) and
(d) did not apply because it is limited to brief, specific periods and
NLSC’s proposal contemplated reimbursing the on-call employees for
commuting costs on a continual basis—without limit or end date.
Page 4-272 – Insert the following text for new footnote number 166a:
[166a] The detailed procedures require agencies to make written
determinations that name the specific employees, explain the reasons
for their exemption, and specify the duration of their exemptions;
they preclude agency heads from delegating this authority to another;
and they require congressional notification of the above information
for each exemption granted. 31 U.S.C. § 1344(d). Other subsections
require the General Services Administration to promulgate
governmentwide regulations and require agencies to maintain logs
detailing all home-to-work transportation provided by the agency. 31
U.S.C. §§ 1344(e), 1344(f).
Page 4-272 – Replace the first full paragraph with the following:
Along with commuting goes parking. It is equally clear that parking
incident to ordinary commuting is also a personal expense. 63 Comp.
Gen. 270 (1984); 43 Comp. Gen. 131 (1963); B-162021, July 6, 1977.
These cases stand for the proposition that the government may not be
required to provide parking facilities for its employees. However, an
agency may provide employee parking facilities if it determines that
the lack of parking facilities will significantly impair the operating
efficiency of the agency and will be detrimental to the hiring and
retention of personnel. 72 Comp. Gen. 139 (1993); 49 Comp. Gen. 476
(1970); B-168946, Feb. 26, 1970; B-155372-O.M., Nov. 6, 1964. When
making a “significant impairment” determination, an agency should
consider important factors relevant to current workplace and
government policies. B-322337, Aug. 3, 2012 (U.S. International Trade
Commission’s (ITC) use of appropriations to acquire parking permits
from commercial parking garage for resale at discounted rates to ITC
employees). For instance, an agency should consider its authority to
establish a telework program and the impact of its determination on
traffic congestion. Id. An agency should also affirmatively explain
the impact on agency operations were it not to subsidize parking
permits for employees. Id. If severely disabled employees are forced
to pay parking costs higher than those paid by nondisabled employees
working at the same facility,167 the agency can subsidize the
difference. 63 Comp. Gen. 270 (1984). For further information, see the
Rehabilitation Act discussion in this chapter, section C.13.c.
Page 4-273 – Replace the first full paragraph with the following:
The purposes of this authority are to improve air quality and reduce
traffic congestion. 5 U.S.C. § 7905 note. Programs established under
section 7905 may include such options as: transit passes or cash
reimbursements for transit passes; furnishing space, facilities, or
services to bicyclists; and nonmonetary incentives. 5 U.S.C. §
7905(b)(2). See also B-318325, Aug. 12, 2009 (agency may use its
authority under 5 U.S.C. § 7905 to provide a cash reimbursement to
those employees who commute to and from work by bicycle). On April 21,
2000, the President issued Executive Order No. 13150, set out at 5
U.S.C. § 7905 note, requiring federal agencies to implement a
transportation fringe benefit program under the authority of section
7905 no later than October 1, 2000. For a discussion of one such
program, see B-316381, July 18, 2008. Compare B-320116, Sept. 15, 2010
(the authority in 5 U.S.C. § 7905 does not permit an agency to install
and operate recharging stations for employees’ privately owned hybrid
vehicles).
Page 4-274 – Insert the following after the first partial paragraph:
In 2007, GAO considered whether an agency may use its appropriated
funds to reimburse employees for home high-speed internet access under
its telecommuting program. Public Law 104-52 requires that the agency
ensure that adequate safeguards against private misuse exist and that
the service is necessary for direct support of the agency’s mission.
Pub. L. No. 104-52, § 620. As part of its program, the Patent and
Trademark Office (PTO) would require telecommuting employees to
maintain high speed internet access that meets certain minimum
technical requirements at their residence or other designated
alternative work site, and it proposed to reimburse participating
employees for the costs incurred in their use of the internet access
related to PTO work. Employees would be eligible for 50 or 100 percent
reimbursement (up to a maximum of $100 per month) depending on the
amount of monthly business use of the internet service. To obtain
reimbursement, employees each month would be required to submit copies
of invoices from the internet service provider and to attest to the
appropriate percentage of internet service used for work-related
purposes. GAO determined that PTO could use its appropriated funds to
reimburse telecommuting employees for the costs of the high-speed
internet access service since such service, “an essential tool in today’
s workplace,” is related or “necessary equipment” authorized by Public
Law 104-52. B-308044, Jan. 10, 2007. In doing so, GAO recommended that
PTO periodically review the reimbursements to ensure that it has
adequate safeguards against private misuse and it is reimbursing
employees for home internet service used for official purposes. Id.
Page 4-275 – Insert the following after the second full paragraph:
The Department of Homeland Security, Customs and Border Protection
(Customs), asked whether it could use its Salaries and Expenses
appropriations to pay for relocation expenses its employees who
currently reside in Canada or Mexico would incur in order to comply
with a new agency directive that their primary residence be in the
United States. The employees work at border stations within the United
States. In response to heightened security concerns, Customs issued a
directive requiring employees assigned to duty stations in the United
States to maintain their primary residence in the United States. The
Federal Travel Regulation, 41 C.F.R. chapters 300–304, does not
address the question of benefits for employees’ relocations that do
not involve a change in duty station. Recognizing Customs’
determination that U.S. residency enables its border workforce to
better carry out is mission, GAO determined that Customs’ Salaries and
Expenses appropriations were available to pay the relocation expenses
if the agency chose to do so. B-306748, July 6, 2006.
15. State and Local Taxes:
Page 4-286 – Insert the following after the third paragraph:
The complexity can be seen in a 2006 decision in which GAO considered
whether a county “surface water management (SWM)” fee was a
permissible fee for a service provided or an impermissible tax against
the federal government. B-306666, June 5, 2006. See also B-306666.2,
Mar. 20, 2009. A county assessed SWM fees to implement management
programs for controlling runoff pollution under the federal Clean
Water Act. 33 U.S.C. § 1329. The Clean Water Act also requires federal
agencies to comply with state and local water pollution requirements, “
including the payment of reasonable service charges.” 33 U.S.C. §
1323(a). We concluded that the SWM fee was not a service charge but
actually a tax because the county’s storm water management was more
like a core government service providing undifferentiated benefits to
the entire public than a narrowly circumscribed benefit incident to a
voluntary act or a service or convenience provided. B-306666, June
5, 2006. Although the Clean Water Act waived sovereign immunity from
certain state and local environmental regulations and fees, it did not
waive immunity from taxation. Such a waiver must clearly and expressly
confer the privilege of taxing the federal government. Id. at 11; see
also B-320998, May 4, 2011 (California e-waste recycling fee is not
covered by the waiver of sovereign immunity contained in section
6001(a) of the Resource Recovery and Conservation Act of 1976, 42
U.S.C. § 6961(a)). In January 2011, amendments to section 313 of the
Clean Water Act were enacted to waive sovereign immunity for the
payment of certain “reasonable” stormwater fees, “regardless of
whether [the fee] ... is denominated a tax.” Pub. L. No. 111-378, 124
Stat. 2148 (Jan. 4, 2011).
Page 4-289 – Replace the second paragraph with the following:
The rule that the government is constitutionally immune from a “vendee
tax” but may pay a valid “vendor tax”—even if the government
ultimately bears its economic burden—has been recognized and applied
in numerous Comptroller General decisions. E.g., B-320998, May 4,
2011; B-302230, Dec. 30, 2003; B-288161, Apr. 8, 2002; 46 Comp. Gen.
363 (1966); 24 Comp. Gen. 150 (1944); 23 Comp. Gen. 957 (1944); 21
Comp. Gen. 1119 (1942); 21 Comp. Gen. 733 (1942). The same rule
applies to state tax levies on rental fees. See 49 Comp. Gen. 204
(1969); B-168593, Jan. 13, 1971; B-170899, Nov. 16, 1970.
Page 4-295 – Replace the first full paragraph with the following:
As with any other occupant of a building, the federal government is a
consumer of services from public utilities. A utility bill may include
various elements in addition to the basic charge for services used.
Some of these elements may be taxes the federal government may
properly pay; others may be taxes, whether presented as a “tax” or an
additional “charge,” from which the government is immune; still others
may not be taxes at all.
An example of a utility “charge” determined to be a tax for which
sovereign immunity has not been waived is the stormwater fee itemized
on the District of Columbia Water and Sewer Authority’s (D.C. Water)
bill for water and sewer services. The fee, while collected by D.C
Water, is assessed by the District of Columbia government to be
credited to a fund administered by the District Department of the
Environment to defray the District’s costs of activities required by
an Environmental Protection Agency permit, such as planting trees and
cleaning streets. The fee is not collected to defray D.C. Water’s
costs of delivering water and sewer services and, therefore, is a tax.
Under the Supremacy Clause of the U.S. Constitution, the United States
and its instrumentalities are immune from direct taxation by state and
local governments. U.S. Const. art. VI, cl. 2. Appropriated funds,
therefore, are not available to pay for tax assessments without a
specific act of Congress waiving sovereign immunity. In this case,
while section 313(a) of the Clean Water Act, 33 U.S.C. § 1323(a),
waives sovereign immunity from many state and local environmental
requirements, it does not waive the federal government’s sovereign
immunity from taxation by state and local governments. B-320795, Sept.
29, 2010. Compare B-319556, Sept. 29, 2010 (D.C. Water’s Impervious
Surface Area charge is a component of the utility rate customers pay
for water and sewer services and may be paid using appropriated funds;
funds collected are used to recover costs of construction projects
directed at reducing and controlling stormwater damage).
Page 4-298 – Replace the first full paragraph with the following:
Naturally, the determination of whether a particular assessment can be
paid does not depend on the taxing authority’s characterization of the
assessment. Thus, payment has been denied where the assessment was
termed a “service charge” (B-306666, June 5, 2006), a “benefit
assessment” (B-168287, Nov. 9, 1970), a “systems development charge”
(B-183094, May 27, 1975), or an “invoice for services” (49 Comp. Gen.
72 (1969)).
[End of section]
Chapter 5: Availability of Appropriations: Time:
Page 5-1 – Replace part of the index for section B.1 as follows:
B. The Bona Fide Needs Rule:
1. Background:
a. Introduction:
b. The Concept:
c. “Parking” or “Banking” Funds:
A. General Principles-—Duration of Appropriations:
2.Types of Appropriations:
Page 5-7 – Insert the following after the second full paragraph:
A multiple year appropriation is available by its very terms for the
bona fide needs of the agency arising during that multiple year
period. Consequently, an agency using a multiple year appropriation
would not violate the bona fide needs rule, discussed in more detail
in section B of this chapter, if it enters into a severable services
contract for more than one year as long as the period of contract
performance does not exceed the period of availability of the multiple
year appropriation. B-317636, Apr. 21, 2009.
Page 5-8 – Replace the first full paragraph with the following:
Unless canceled in accordance with 31 U.S.C. § 1555 or rescinded by
another law, there are no time limits as to when no-year funds may be
obligated and expended and the funds remain available for their
original purposes until expended. 43 Comp. Gen. 657 (1964); 40 Comp.
Gen. 694 (1961). This includes earmarks applicable to the use of no-
year funds since they are coextensive with, and inseparable from, the
period of availability of the no-year appropriation to which they
relate. B-274576, Jan. 13, 1997. Also, the bona fide needs rule, which
provides that an appropriation limited to obligation for a definite
period may be obligated only to meet a legitimate need arising during
the availability of the appropriation, does not apply to no-year funds,
which are not so limited. B-317636, Apr. 21, 2009. See section B of
this chapter for a further discussion of the bona fide needs rule.
B. The Bona Fide Needs Rule:
1. Background:
Page 5-13 – Replace the first full paragraph with the following:
While the rule itself is universally applicable, determination of what
constitutes a bona fide need of a particular fiscal year depends
largely on the facts and circumstances of the particular case. B-
308010, Apr. 20, 2007; 70 Comp. Gen. 469, 470 (1991); 44 Comp. Gen.
399, 401 (1965); 37 Comp. Gen. at 159.
Page 5-15 – Insert the following new section c., including the
references to new footnote numbers 8a, 8b, 8c, and 8d, after the first
full paragraph:
c.“Parking” or “Banking” Funds:
“Parking” or “banking” funds are terms used to describe a transfer of
funds to a revolving fund through an interagency agreement in an
attempt to keep funds available for new work after the period of
availability for those funds expires.8a Parking usually occurs when an
agency transfers fixed-year funds to a revolving or franchise fund in
the mistaken belief that, by doing so, the funds lose their fixed-year
character and remain available indefinitely. However, an agency may
not extend the availability of its appropriations by transferring them
to another agency. B-288142, Sept. 6, 2001. Use of these expired
parked funds violates the bona fide needs rule. An interagency
agreement must be based upon a legitimate, specific, and adequately
documented requirement representing a bona fide need of the year in
which the order is made.
GAO has reported on the parking of funds through interagency
agreements, and, over a period of several years, Department of Defense
(DOD) officials, including the Comptroller, warned against the misuse
of interagency agreements to park or bank funds.8b In addition, the
Inspectors General for DOD and the Department of the Interior
(Interior) have faulted their agencies for misusing interagency
transactions in this fashion.[Footnote 8c] In October 2006, the
Treasury issued a bulletin instructing ordering agencies to monitor
the activity and age of an interagency order and where there has been
no activity for more than 180 days, the ordering agency “shall
determine the reasons for the lack of activity on the order.” I TFM
Bulletin No. 2007-03, Attachment I, ¶ III.B.2 (Oct. 1, 2006).
In a 2007 decision, GAO found that DOD improperly parked funds when it
transferred fiscal year appropriations to an Interior franchise fund,
GovWorks.8d B-308944, July 17, 2007. GovWorks was established to
provide common administrative services to Interior and other agencies
by procuring goods and services from vendors on behalf of federal
agencies on a competitive basis. DOD used Military Interdepartmental
Purchase Requests (MIPRs) to transfer funds to GovWorks but did not
identify the specific items or services that DOD wanted GovWorks to
acquire on its behalf until after the funds had expired. GAO concluded
that DOD had improperly parked funds with GovWorks by transferring
funds from one fiscal year for use by GovWorks for goods and services
after the period of availability for those funds had expired. GAO
pointed out that, by doing so, “officials of both agencies acted in
disregard of ... the bona fide needs rule.” Id. at 13. See also B-
318425, Dec. 8, 2009 (the Chemical Safety and Hazard Investigation
Board’s appropriation is not available to fund a proposed interagency
agreement for identity cards and related maintenance services because
the agreement did not specify a period of performance for the
agreement, thus creating an open-ended obligation); B-317249, July 1,
2009 (because an order submitted through the General Services
Administration’s AutoChoice Summer Program is not finalized until
October, the Natural Resources Conservation Service (NRCS) does not
incur an obligation until October; NRCS may not obligate the
appropriation current when it submits the order).
Several years later, the Justice Department relied on the GovWorks
decision and related case law when it provided guidance to GSA and VA
on the application of the bona fide needs rule to an interagency
agreement. Under specific statutory authority independent of the
Economy Act, GSA had agreed to help VA obtain a new contract for human
resources services. Accordingly, in August 2010, VA obligated funds
against an available appropriation. However, the agencies did not
receive approval from OMB and OPM to use a certain procurement
practice until September 2011. The agencies asked whether GSA could
still perform under the agreement using the funds originally obligated
by VA in fiscal year 2010, which had now otherwise expired. Justice
concluded that GSA could use those funds without running afoul of the
bona fide needs rule. Justice determined that VA had a bona fide need
for the services in fiscal year 2010 and did not appear to be
improperly parking funds for use in a later fiscal year, as DOD had
done in the GovWorks decision. The delay was apparently attributable
to a new regulatory review process conducted by OMB and OPM.
Memorandum Opinion for the General Counsel, Department of Veterans
Affairs, and the General Counsel, General Services Administration,
Whether the General Services Administration May Proceed with an
Assisted Acquisition for the Department of Veterans Affairs in Fiscal
Year 2012 Using the Department’s Fiscal Year 2009/2010 Funds, OLC
Opinion, Mar. 2, 2012, available at [hyperlink,
www.justice.gov/olc/memoranda-opinions.html].
Page 5-15 – Insert the following as new footnote number 8a:
[8a] DOD, Undersecretary of Defense, Comptroller, Memorandum for the
Assistant Secretary of the Army (Financial Management and
Comptroller), et al., Proper Use of Interagency Agreements for Non-
Department of Defense Contracts Under Authorities Other than the
Economy Act, Mar. 24, 2005 (2005 DOD Memorandum).
Page 5-15 – Insert the following as new footnote number 8b:
[8b] See GAO, Interagency Contracting: Improved Guidance, Planning,
and Oversight Would Enable the Department of Homeland Security to
Address Risks, GAO-06-996 (Washington, D.C.: Sept. 27, 2006); Improper
Use of Industrial Funds By Defense Extended the Life of Appropriations
Which Otherwise Would Have Expired, GAO/AFMD-84-34 (Washington, D.C.:
June 5, 1984); 2005 DOD Memorandum; DOD, Undersecretary of Defense,
Memorandum for the Chairman of the Joint Chiefs of Staff, et al.,
Fiscal Principles and Interagency Agreements, Sept. 25, 2003.
Page 5-15 – Insert the following as new footnote number 8c:
[8c] DOD, Office of Inspector General, FY 2005 DOD Purchases Made
Through the Department of the Interior, No. D-2007-044 (Jan. 16,
2007); Interior, Office of the Inspector General, FY 2005 Department
of the Interior Expenses Made on Behalf of the Department of Defense,
No. X-IN-MOA-0018-2005 (Jan. 9, 2007).
Page 5-15 – Insert the following as new footnote number 8d:
[8d] GovWorks is officially known as the Acquisition Services
Directorate. See [hyperlink, http://www.aqd.nbc.gov] (last visited
Dec. 30, 2010).
2. Future Years’ Needs:
Page 5-17 – Insert the following after the first partial paragraph:
An interesting situation involving a contract with renewable options
arose in B-308026, Sept. 14, 2006. The National Labor Relations Board
(NLRB) entered into a contract with Electronic Data Systems for the
acquisition of ongoing operational and technical support for its
automated Case Activity Tracking System. The contract’s initial
performance period was October 1, 2001, through September 30, 2002,
with options through September 30, 2015. On September 30, 2005, NLRB
exercised option four, specifying a performance period of October 1,
2005, through September 30, 2006, and charged the obligation to its
fiscal year 2005 appropriation. In a June 2006 report, the NLRB
Inspector General concluded that NLRB had improperly obligated its
fiscal year 2005 appropriation because obligating the fiscal year 2005
appropriation for the performance of severable services that would
occur entirely in fiscal year 2006 was a violation of the bona fide
needs rule. The Inspector General said that NLRB should charge the
obligation against its fiscal year 2006 appropriation. NLRB proposed
to remedy its improper obligation by modifying the contract to have
the performance period of the contract run from September 30, 2005,
through September 29, 2006, instead of October 1, 2005, through
September 30, 2006. NLRB explained that it had intended a performance
period commencing September 30, 2005, but due to an inadvertent
ministerial error this was not reflected in the contract. GAO agreed
with the Inspector General. GAO said that, given the terms of the
contract, NLRB had incurred an obligation against its fiscal year 2006
appropriation and that NLRB should adjust its accounts accordingly.
NLRB could not remedy its improper obligation by adjusting its
contract’s performance period instead of its accounts.
“It is one thing for an agency to take full advantage of available
appropriations, maximizing the effectiveness of federal funds
entrusted to its use; it is quite another thing, however, for an
agency to alter executed contracts in order to reach expired funds—-
funds that Congress appropriated for agency programs and activities of
the previous fiscal year. That is what NLRB proposes to do. Were NLRB to
adjust the fourth option’s performance period, its sole reason for
doing so would be to reach fiscal year 2005 appropriations because, in
September 2005, that is what NLRB had intended to do. However, NLRB’s
fiscal year 2005 appropriation has expired.
... Instead of adjusting its obligations to reflect what actually
occurred, NLRB would revise what actually occurred so that it can
finance option four with fiscal year 2005 funds. ... The account
adjustment authority of [31 U.S.C. § 1553(a)] is not a palliative for
errors of this sort.”
B-308026, Sept. 14, 2006, at 5–6 (footnote omitted).
Page 5-17 – Insert the following after the first full paragraph:
In 2007, GAO considered how this related to seven end-of-the-fiscal
year subscription renewals. The National Labor Relations Board (NLRB)
purchased seven Web site database subscriptions to support the work of
its attorneys and other professionals. B-309530, Sept. 17, 2007. In
September 2006, NLRB placed orders to renew each of these
subscriptions with the respective vendors, stating that it needed to
have the orders placed for the renewal before the existing
subscriptions expired in order to ensure uninterrupted delivery. Each
order placed was for a period of one year beginning on the day
following the expiration of the existing subscription and, for each,
the agency obligated its fiscal year 2006 annual appropriation. For
five subscriptions, the performance period was from October 1, 2006,
to September 30, 2007; for two subscriptions, the performance period
was from November 1, 2006, to October 31, 2007. Id. GAO determined
that NLRB did not violate the bona fide needs rule for the five Web
site database subscription renewals that it needed to have in place on
October 1, 2006, the first day of fiscal year 2007. Even though
delivery of the renewed subscriptions would occur entirely in fiscal
year 2007, NLRB reasonably determined that the renewal orders needed
to be placed in fiscal year 2006 to ensure continued receipt of the
subscriptions past the expiration of the existing subscriptions on
September 30, 2006. Id. However, NLRB violated the bona fide needs
rule when it obligated fiscal year 2006 funds to renew the two Web
site database subscriptions that were not due to expire until October
31, 2006. These subscription renewals were a bona fide need of fiscal
year 2007 for which fiscal year 2007 appropriations should have been
used. Id.
5. Services Rendered beyond the Fiscal Year:
Page 5-24 – Replace the second paragraph after the quote with the
following:
The rationale of 23 Comp. Gen. 370 was applied in 59 Comp. Gen. 386
(1980) (requisition for printing accompanied by manuscript sufficient
for Government Printing Office to proceed with job). See, e.g., B-
317139, June 1, 2009 (contract for the design, development, and
deployment of a financial intelligence data retrieval system); 65
Comp. Gen. 741 (1986) (contract for study and final report on
psychological problems among Vietnam veterans); B-257977, Nov. 15,
1995 (contract for two-year intern training program since interns are
required to complete entire training program to be eligible for
noncompetitive Presidential Management Intern appointment). See also B-
305484, June 2, 2006 (appointment of an arbitrator to hear a case is
in the nature of a nonseverable service and the National Mediation
Board should record an obligation of the current appropriation based
on the estimated cost of paying the arbitrator to submit an award); 73
Comp. Gen. 77 (1994) (subsequent modifications to Fish and Wildlife
Service research work orders should be charged to the fiscal year
current when the work orders were issued since the purpose of the
research is to provide a final research report and the services under
the contract are nonseverable). The last two decisions are noteworthy
because they pointed out that limitation of funds clauses or subject
to availability clauses do not affect the application of the bona fide
needs rule and the severable test. B-305484; 73 Comp. Gen. at 80.
Page 5-27 – Replace the first full paragraph with the following:
As a general matter, the relevant date to ascertain whether training
is a bona fide need of a particular fiscal year is the date that the
training is delivered. B-321296, July 13, 2011. Thus, the cost of
training ordinarily is properly charged to the appropriation available
in the fiscal year in which the training is delivered. However, in
some limited circumstances, training may be a bona fide need of the
fiscal year prior to the fiscal year in which the training is
delivered. 70 Comp. Gen. 296 (1991). For example, the prior year’s
appropriation may be used for training occurring in the subsequent
fiscal year, where the training provider requires the agency to
register during the expiring fiscal year, the training date offered is
the only one available, and the time between the registration and the
training is not excessive. Id. In 70 Comp. Gen. 296, training that
began the first day of fiscal year 1990 was held chargeable to 1989
appropriations where the training had been identified as a need for
1989. Compare B-321296 (where training was delivered in January 2011
and registration not required until October 15, 2010, such training
was a bona fide need of fiscal year 2011 even though the need for
training was identified in fiscal year 2010). Training also tends to
be nonseverable. Thus, where a training obligation is incurred in one
fiscal year, the entire cost is chargeable to that year, regardless of
the fact that training may extend into the following year. B-233243,
Aug. 3, 1989; B-213141-O.M., Mar. 29, 1984.
6. Replacement Contracts:
Page 5-32 – Replace the third paragraph with the following:
Logically and inevitably, the next question would be why the rule
should not be the same regardless of whether the defect leading to
termination is determined by an external reviewing body or by the
contracting agency itself. It should make no difference, GAO concluded
in 70 Comp. Gen. 230 (1991). The essence of the problem—a legal
impropriety in the procurement process requiring corrective action—is
no different. Thus, the replacement contract rule, with its attendant
conditions, applies where the contracting agency determines that a
contract award was improper and terminates the contract for the
convenience of the government, provided there is clear evidence that
the award was erroneous and the agency documents its determination
with appropriate findings of fact and law. Id. See also B-322628, Aug.
3, 2012 (finding that an agency may award a replacement grant where a
grant officer discovers a defect in the competitive selection process).
7. Contract Modifications and Amendments Affecting Price:
Page 5-36 – Replace the last paragraph with the following:
As noted above, there is an important exception or qualification to
the antecedent liability rule. In cost reimbursement contracts,
discretionary cost increases (i.e., increases which are not
enforceable by the contractor), which exceed funding ceilings
established by the contract may be charged to funds currently
available when the discretionary increase is granted by the
contracting officer. 61 Comp. Gen. 609 (1982). It would be
unreasonable, the decision pointed out, to require the contracting
officer to reserve funds in anticipation of increases beyond the
contract’s ceiling. Id. at 612. Changes that do not exceed the
stipulated ceiling continue to be chargeable to funds available when
the contract was originally made (id. at 611), as do amounts for final
overhead in excess of the ceiling where the contractor has an
enforceable right to those amounts (id. at 612). Since prior decisions
such as 59 Comp. Gen. 518 had not drawn the below-ceiling/above-
ceiling distinction, 61 Comp. Gen. 609 modified them to that extent.
Other cases applying this approach are B-317139, June 1, 2009 and 65
Comp. Gen. 741 (1986).
8. Multiyear Contracts:
Page 5-39 – Replace the first sentence of the second full paragraph
with the following:
If an agency does not have specific multiyear contracting authority
but enters into a multiyear contract solely under authority of a
multiple year or no-year appropriation, the full contract amount must
be obligated at the time of contract award. See, e.g., B-322160, Oct.
2, 2011; B-195250, July 11, 1979.
Page 5-41 – Replace the first full paragraph with the following:
If an agency is contracting with fiscal year appropriations and does
not have multiyear contracting authority, one course of action, apart
from a series of separate fiscal year contracts, is a fiscal year
contract with renewal options, with each renewal option (1) contingent
on the availability of future appropriations and (2) to be exercised
only by affirmative action on the part of the government (as opposed
to automatic renewal unless the government refuses). Leiter v. United
States, 271 U.S. 204 (1926); 66 Comp. Gen. 556 (1987); 36 Comp. Gen.
683 (1957); 33 Comp. Gen. 90 (1953); 29 Comp. Gen. 91 (1949); 28 Comp.
Gen. 553 (1949); B-88974, Nov. 10, 1949. The inclusion of a renewal
option is key; with a renewal option, the government incurs a
financial obligation only for the fiscal year, and incurs no financial
obligation for subsequent years unless and until it exercises its
right to renew. The government records the amount of its obligation
for the first fiscal year against the appropriation current at the
time it awards the contract. The government also records amounts of
obligations for future fiscal years against appropriations current at
the time it exercises its renewal options. The mere inclusion of a
contract provision conditioning the government’s obligation on future
appropriations without also subjecting the multiyear contract to the
government’s renewal option each year would be insufficient. Cray
Research, Inc. v. United States, 44 Fed. Cl. 327, 332 (1999). Thus, in
42 Comp. Gen. 272 (1962), the Comptroller General, while advising the
Air Force that under the circumstances it could complete that
particular contract, also advised that the proper course of action
would be either to use an annual contract with renewal options or to
obtain specific multiyear authority from Congress. 42 Comp. Gen. at
278.
Page 5-43 – Insert the following after the quoted language in the
first partial paragraph:
Another course of action for an agency with fiscal year money to cover
possible needs beyond that fiscal year is an indefinite-
delivery/indefinite-quantity (IDIQ) contract. An IDIQ contract is a
form of an indefinite-quantity contract, which provides for an
indefinite quantity of supplies or services, within stated limits,
during a fixed period. 48 C.F.R. § 16.504(a). Under an IDIQ
contract, actual quantities and delivery dates remain undefined until
the agency places a task or delivery order under the contract. When an
agency executes an indefinite-quantity contract such as an IDIQ
contract, the agency must record an obligation in the amount of the
guaranteed minimum purchase. At the time of award, the government
commits itself to purchase only a minimum amount of supplies or
services and has a fixed liability for the amount to which it
committed itself. See 48 C.F.R. §§ 16.501-2(b)(3) and 16.504(a)(1).
The agency has no liability beyond its minimum commitment unless and
until it places additional orders. An agency is required to record an
obligation at the time it incurs a legal liability. 65 Comp. Gen. 4, 6
(1985); B-242974.6, Nov. 26, 1991. Therefore, for an IDIQ contract, an
agency must record an obligation for the guaranteed minimum amount at
the time of contract execution. See, e.g., B-318046, July 7, 2009 (in
the absence of reliable historical usage data, an agency may use $500
as the guaranteed minimum for IDIQ contracts, which amount must be
obligated at the time of award). In B-302358, Dec. 27, 2004, GAO
determined that the Bureau of Customs and Border Protection’s Customs)
Automated Commercial Environment contract was an IDIQ contract. As
such, Customs incurred a legal liability of $25 million for its
minimum contractual commitment at the time of contract award. However,
Customs failed to record its $25 million obligation until five months
after contract award. GAO determined that to be consistent with the
recording statute, 31 U.S.C. § 1501(a)(1), Customs should have
recorded an obligation for the contract minimum of $25 million against
a currently available appropriation for the authorized purpose at the
time the IDIQ contract was awarded.
In establishing the guaranteed minimum quantity in an IDIQ contract,
an agency must consider both contracting and appropriations law
principles. The guaranteed minimum must not only constitute sufficient
consideration to make the contract binding, but also reflect the bona
fide needs of the agency at the time of execution of the contract. B-
321640, Sept. 19, 2011, at 6.
9. Specific Statutes Providing for Multiyear and Other Contracting
Authorities:
Page 5-44 – Replace the last paragraph with the following:
There are several general authorities to contract across a fiscal year
or to enter into multiyear contracts. For example, 41 U.S.C. §
253l authorizes the heads of executive agencies to enter into
procurement contracts for severable services for periods beginning in
one fiscal year and ending in the next fiscal year as long as the
contracts do not exceed one year. It permits agencies to obligate the
total amount of the contract to appropriations of the first fiscal
year. Without specific statutory authority such as this, such action
would violate the bona fide needs rule (see section B.5 of this
chapter). Section 253l, in effect, redefines for an agency that elects
to contract under authority of section 253l its bona fide need for the
severable services for which it is contracting. Related statutes
extend this authority to various legislative branch entities.29
Similarly, 10 U.S.C. § 2410a authorizes the military departments to
use current fiscal year appropriations to finance severable service
contracts into the next fiscal year for a total period not to exceed
one year. GAO states in B-259274, May 22, 1996, that “the purpose of
10 U.S.C. § 2410a is to overcome the bona fide needs rule,” which is
another way of saying that Congress has provided the military
departments with authority to properly enter into a contract not to
exceed one year that crosses fiscal years. The statute specifically
authorizes the departments to obligate “funds made available for a
fiscal year ... for the total amount of a contract entered into” under
section 2410a(a). Cf. B-317636, Apr. 21, 2009 (an agency using
multiple year or no-year appropriations rather than fiscal year
appropriations to fund a severable services contract does not need to
refer to 41 U.S.C. § 253l or 10 U.S.C. § 2410a to achieve this same
flexibility).
Page 5-46 – Replace the last paragraph with the following:
The Federal Acquisition Streamlining Act of 1994 (FASA) and related
statutes extended multiyear contracting authority with annual funds to
nonmilitary departments.30 FASA authorizes an executive agency to
enter into a multiyear contract for the acquisition of property, which
includes leases of real property, or services for more than one, but
not more than five years, if the agency makes certain administrative
determinations. 41 U.S.C. § 254c; B-316860, Apr. 29, 2009. Related
laws extend this authority to various legislative branch agencies.31
Through FASA and the related laws, Congress has relaxed the
constraints of the bona fide needs rule by giving agencies the
flexibility to structure contracts to fund the obligations up front,
incrementally, or by using the standard bona fide needs rule approach.
B-277165, Jan. 10, 2000. To the extent an agency elects to obligate a
five-year contract incrementally, it must also obligate termination
costs. Cf. B-302358, Dec. 27, 2004 (since the contract at issue was an
indefinite-delivery, indefinite-quantity contract, it was not subject
to the requirements of 41 U.S.C. § 254c and the agency did not need to
obligate estimated termination costs at the time of contract award).
C. Advance Payments:
1. The Statutory Prohibition:
Page 5-53 – Insert the following before the first full paragraph:
Another example of a statutory exception was considered in B-306975,
Feb. 27, 2006. The National Archives and Records Administration (NARA)
stores temporary and pre-archival records that belong to it and other
federal agencies in its Records Center Programs Facilities. Other
federal agencies may enter into agreements with NARA to transfer and
store records at the NARA records centers. The Treasury and General
Appropriations Act, 2000, established the Records Center Revolving
Fund to pay for expenses and equipment necessary to provide the
storage and authorized agencies to make advance payments to the
Revolving Fund. Pub. L. No. 106-58, title IV, 113 Stat. 430, 460–61
(Sept. 29, 1999). GAO had no objection, therefore, to NARA’s proposal
to bill its customers at the beginning of each month based on its
estimate of services it will provide that month and to adjust the next
month’s bill to reflect actual costs of services rendered. However, if
a customer advances fiscal year funds for September’s estimated costs,
NARA may not credit excess amounts in adjusting October’s bill but
rather must return the excess to the customers. These funds would not
be available for obligation of the next fiscal year commencing October
1. Likewise, if a customer agency owes more than the amount advanced
in September, the customer must cover the underpayment from the
previous fiscal year’s funds. B-306975.
D. Disposition of Appropriation Balances:
3. Expired Appropriations Accounts:
Page 5-72 – Replace footnote number 50 with the following:
[50] This is similar to the treatment of the balances during the first
two post-expiration fiscal years under the 1956 legislation. A
different account closing law applies to the United States Capitol
Police (USCP), although it is virtually identical to what is provided
in title 31. 2 U.S.C. § 1907(d). For example, USCP’s fiscal year 2003
expired appropriations remained available for a five-year period to
advance amounts to, and cover costs incurred by, the Department of
Transportation’s Volpe Center for purchase orders properly obligated
by USCP in fiscal year 2003. However, the 2003 appropriation was
canceled by operation of law on September 30, 2008, and thus USCP and
Volpe Center may not use amounts of fiscal year 2003 advances in
fiscal year 2009. B-319349, June 4, 2010.
Page 5-72 – Replace the last partial paragraph with the following:
Unobligated balances in the expired account cannot be used to satisfy
an obligation properly chargeable to current appropriations (B-308944,
July 17, 2007; 50 Comp. Gen. 863 (1971)), or to any other expired
account.52 See Chapter 5, section B.1.c. The authority of 31 U.S.C. §
1553(a) is intended to permit agencies to adjust their accounts to
more accurately reflect obligations and liabilities actually incurred
during the period of availability. 63 Comp. Gen. 525, 528 (1984).
However, arbitrary deobligation in reliance upon the authority to make
subsequent adjustments is not consistent with the statutory purpose. B-
179708, July 10, 1975.
4. Closed Appropriation Accounts:
Page 5-73 – Replace the third full paragraph with the following:
Once an account has been closed:
“Obligations and adjustments to obligations that would have been
properly chargeable to that account, both as to purpose and in amount,
before closing and that are not otherwise chargeable to any current
appropriation account of the agency may be charged to any current
appropriation account of the agency available for the same purpose.”
31 U.S.C. § 1553(b)(1). See also B-301561, June 14, 2004.
Page 5-74 – Replace the second full paragraph with the following:
The authority to use current year appropriations to pay obligations
chargeable to closed accounts is not unlimited, however. The
cumulative total of old obligations payable from current
appropriations may not exceed the lesser of 1 percent of the current
appropriation or the remaining balance (whether obligated or
unobligated) canceled when the appropriation account is closed. 31
U.S.C. § 1553(b). See, e.g., B-318831, Apr. 28, 2010. In view of the
limitations on the amount of current appropriations that may be used
to pay obligations properly charged to closed accounts, agencies must
maintain records of the appropriation balances canceled beyond the end
of the five-year period and adjust these balances as subsequently
presented obligations are liquidated. 73 Comp. Gen. 338, 341–42
(1994). Otherwise, there is no way for agencies to ensure that
payments do not exceed the original appropriation.
5. Exemptions from the Account Closing Procedures:
Page 5-76 – Replace the second full paragraph with the following:
To the extent of its applicability, the statutory scheme found at 31
U.S.C. §§ 1551–1558 provides the exclusive method for the payment of
obligations chargeable to expired appropriations. B-101860, Dec. 5,
1963. Thus, there is generally no authority to transfer appropriations
to some form of trust fund or working fund for the purpose of
preserving their availability. Id.; B-319349, June 4, 2010 (United
States Capitol Police (USCP) and Department of Transportation’s Volpe
Center may not use amounts advanced from USCP’s fiscal year 2003
appropriation to pay costs incurred by the Volpe Center in fiscal year
2009 after appropriation was canceled by operation of law); B-308944,
July 17, 2007 (the Department of Defense transferred fiscal year funds
to a franchise fund in an attempt to impermissibly extend the funds’
availability). See Chapter 5, section B.1.c. See also 31 U.S.C. §
1532, which prohibits the transfer of appropriations to a working fund
without statutory authority. In B-288142, Sept. 6, 2001, customer
agencies made advances from their fixed period appropriations to the
Library of Congress for deposit to the credit of the no-year FEDLINK
revolving fund. The advances were used by the Library of Congress to
pay the cost of service provided to the agencies by Library of
Congress contractors. Once the service was provided and the cost
determined, the Library discovered that some agencies had advanced
amounts in excess of the cost of the service ordered. We determined
that the Library of Congress lacked authority to apply the excess
amount to pay for orders for service placed after the expiration of
the fixed period appropriation charged with the advance.
[End of section]
Volume 2:
Chapter 6 – Availability of Appropriations: Amount:
Chapter 7 – Obligation of Appropriations:
Chapter 8 – Continuing Resolutions:
Chapter 9 – Liability and Relief of Accountable Officers:
Chapter 10 – Federal Assistance: Grants and Cooperative Agreements:
Chapter 11 – Federal Assistance: Guaranteed and Insured Loans:
[End of section]
Chapter 6: Availability of Appropriations: Amount:
B. Types of Appropriation Language:
1. Lump-Sum Appropriations:
Page 6-6 – Replace the last partial paragraph with the following:
The answer to these questions is one of the most important principles
of appropriations law. The rule, simply stated, is this: Restrictions
on a lump-sum appropriation contained in the agency’s budget request
or in legislative history are not legally binding on the department or
agency unless they are carried into (specified in) the appropriation
act itself, or unless some other statute restricts the agency’s
spending flexibility. See Hein v. Freedom From Religion Foundation,
Inc., 551 U.S. 587, 608 n.7 (2007) and cases cited. This is an
application of the fundamental principle of statutory construction
that legislative is not law and carries no legal significance unless
“anchored in the text of the statute.” Shannon v. United States, 512
U.S. 573, 583 (1994).5 Of course, the agency cannot exceed the total
amount of the lump-sum appropriation, and its spending must not
violate other applicable statutory restrictions.[Footnote 6] The rule
applies equally whether the legislative history is mere acquiescence
in the agency’s budget request or an affirmative expression of intent.
Page 6-15 – Replace the first full paragraph with the following:
This decision illustrates another important point: The terms “lump-sum”
and “line-item” are relative concepts. See Salazar v. Ramah Navajo
Chapter, ___ U.S. ___, 132 S. Ct. 2181, 2194, fn. 10 (2012). The $244
million appropriation in the Newport News case could be viewed as a
line-item appropriation in relation to the broader “Shipbuilding and
Conversion” category, but it was also a lump-sum appropriation in
relation to the two specific vessels included. This factual
distinction does not affect the applicable legal principle. As the
decision explained:
“Contractor urges that LTV is inapplicable here since LTV involved a
lump-sum appropriation whereas the DLGN appropriation is a more
specific ‘line item’ appropriation. While we recognize the factual
distinction drawn by Contractor, we nevertheless believe that the
principles set forth in LTV are equally applicable and controlling
here....Implicit in our holding in LTV and in the other authorities
cited is the view that dollar amounts in appropriation acts are to be
interpreted differently from statutory words in general. This view, in
our opinion, pertains whether the dollar amount is a lump-sum
appropriation available for a large number of items, as in LTV, or, as
here, a more specific appropriation available for only two items.”
55 Comp. Gen. at 821–22.
Page 6-20 – Replace the first full paragraph with the following:
The Court noted that while the agency had repeatedly informed Congress
about the program in question, “as we have explained, these
representations do not translate through the medium of legislative
history into legally binding obligations.” Id. at 194. Subsequent
judicial decisions have, of course, followed this approach. E.g., Hein
v. Freedom From Religion Foundation, Inc., 551 U.S. 587, 608 n.7
(2007); State of California v. United States, 104 F.3d 1086, 1093–94
(9th Cir. 1997), cert. denied, 522 U.S. 806 (1997); State of New
Jersey v. United States, 91 F.3d 463, 470–71 (3rd Cir. 1996); Vizenor
v. Babbitt, 927 F. Supp. 1193 (D. Minn. 1996); Allred v. United
States, 33 Fed. Cl. 349 (1995). But see Ramah Navajo School Board,
Inc. v. Babbitt, 87 F.3d 1338 (D.C. Cir. 1996).[Footnote 19]
Page 6-24 – Insert the following, including references to footnote
numbers 23a and 23b after the second full paragraph:
In 2012, the Supreme Court addressed that appropriation act provision
and similar provisions with regard to the federal government’s
responsibility to pay full contract support costs under the Indian
Self-Determination and Education Assistance Act (ISDA).
Salazar v. Ramah Navajo Chapter, ___ U.S. ___, 132 S. Ct. 2181 (2012).
During fiscal years 1994 to 2001, the tribes contracted with the
Secretary of the Interior to provide services such as law enforcement,
environmental protection, and agricultural assistance. Id. at 2187.
For each of these fiscal years, the Bureau of Indian Affairs (BIA)
received a lump-sum appropriation “for the operation of Indian
programs.” See, e.g., Consolidated Appropriations Act, 2000, Pub. L.
No. 106-113, app. C, title I, 113 Stat. 1501, 1501A-148 (Nov. 29,
1999). In each fiscal year, Congress provided that of the lump sum
appropriated, “not to exceed” a particular amount “shall be available
for payments to tribes and tribal organizations for contract support
costs” under the ISDA. Id.
The Court noted that in each fiscal year, the “not to exceed” amount
was sufficient to pay in full any individual tribal contractor’s
support costs, but not to pay all tribal contractors’ costs
collectively. Ramah, 132 S. Ct. at 2187. As a result, the Secretary
decided to pay the tribal contractors on a uniform, pro rata basis.
Id. The tribal contractors sued under the Contract Disputes Act,
alleging that the government failed to pay the full amount of contract
support costs due from fiscal years 1994 through 2001 as required by
ISDA and their contracts. Id.
As in Cherokee Nation, the Court found for the tribal contractors. The
Court stated that as long as BIA had enough funds to pay the full
support costs of any individual contractor, BIA was legally obligated
to pay that contractor, even if it did not have sufficient funds to
pay the rest of its tribal contractors. Id. at 2190. The Court noted
that ISDA expressly provides that BIA is not required to reduce
funding for one tribe to make funds available to another tribe.
Id. (citing 25 U.S.C. § 450j-1(b)). As in Cherokee Nation, the Court
stated that all tribal contractors were entitled to rely on the
Government’s promise to pay because the tribes are “not chargeable
with knowledge” of the BIA’s administration of this proviso. Id. at
2191.
The Court said that its holding did not leave the “not to exceed”
amount in BIA’s lump-sum appropriation without legal effect. The
Court stated:
“To the contrary, it prevents the Secretary from reprogramming other
funds to pay contract support costs—-thereby protecting funds that
Congress envisioned for other BIA programs, including tribes that
choose not to enter ISDA contracts. But when an agency makes competing
contractual commitments with legally available funds and then fails to
pay, it is the Government that must bear the fiscal consequences, not
the contractor.”
Id. at 2192.
The Court noted that if an agency is unable to pay its contractual
obligations within its appropriations, a “contractor [is] free to
pursue appropriate legal remedies arising because the Government broke
its contractual promise.” Id. at 2194 (citing Cherokee Nation, 543
U.S. at 642). The Court also pointed out that the ISDA expressly
provides that tribal contractors may sue for money damages under the
Contract Disputes Act upon the government’s failure to pay, and that
judgments against the government under that Act are payable from the
Judgment Fund.[Footnote 23a\ Id. at 2193.
In the end, the Court recognized that BIA must reconcile two competing
statutory provisions. Id. at 2195. First, ISDA requires the Secretary
to accept every qualifying ISDA contract, including full funding of
contract support costs. Id. Second, BIA did not receive sufficient
appropriations to pay in full each tribal contractor.[Footnote 23b] Id.
The Court stated that the government’s “frustration is understandable,
but the dilemma’s resolution is the responsibility of Congress.” Id.
The Court suggested that Congress could amend ISDA, pass a moratorium
on the formation of new ISDA contracts, or provide line-item
appropriations on a contractor-by-contractor basis. Id. Alternatively,
of course, Congress could appropriate sufficient funds to BIA to meet
the tribal contractors’ total contractor support costs. Id.
Page 6-24 – Insert the following as new footnote number 23a:
[23a] The Court did not address reimbursements to the Judgment Fund
from agencies’ available appropriations under the Contract Disputes
Act. See 41 U.S.C. § 7108(c).
Page 6-24 – Insert the following as new footnote number 23b:
[23b] The Court found unpersuasive the Government’s argument that
requiring the Secretary to pay full contract support costs could lead
to an Antideficiency Act violation. See 132 S. Ct. at 2193, fn. 7.
C. The Antideficiency Act:
2. Obligation/Expenditure in Excess or Advance of Appropriations:
Page 6-39 – Replace the first full paragraph with the following:
Some government corporations are also classified as agencies of the
United States government, and their officials are therefore “officers
and employees of the United States.” To the extent they operate with
funds which are regarded as appropriated funds, they too are subject
to 31 U.S.C. § 1341(a)(1). E.g., B-223857, Feb. 27, 1987 (Commodity
Credit Corporation); B-135075-O.M., Feb. 14, 1975 (Inter-American
Foundation). It follows that section 1341(a)(1) does not apply to a
corporation that, although established by federal statute, is not an
agency of the United States government. E.g., B-308037, Sept. 14, 2006
(Legal Services Corporation); B-175155-O.M., July 26, 1976 (Amtrak).
These principles are, of course, subject to variation if and to the
extent provided in the relevant organic legislation.
Page 6-40 – Insert the following after the first full paragraph:
In B-308715, Apr. 20, 2007, the Department of Energy (DOE) violated
the Antideficiency Act when it obligated and spent appropriated funds
in advance and in excess of available appropriations. DOE is
statutorily barred from using any funds provided by Energy and Water
Development appropriation acts “to implement or finance authorized ...
loan guarantee programs unless specific provision is made for such
programs in an appropriation Act.” 42 U.S.C. § 7278. DOE used 2006 and
2007 appropriations for a loan guarantee program even though Congress
had not enacted the appropriations for that purpose. Consequently, DOE
violated the Antideficiency Act, as well as the purpose statute, 31
U.S.C. § 1301(a) (appropriation “shall be applied only to the objects
for which the appropriations were made”), discussed in Chapter 4.
Page 6-41 – Replace the last paragraph with the following:
In simple terms, once an appropriation is exhausted, the making of any
further payments, apart from using expired balances to liquidate or
make adjustments to valid obligations recorded against that
appropriation, violates 31 U.S.C. § 1341. When the appropriation is
fully expended, no further payments may be made in any case. If an
agency finds itself in this position, unless it has transfer authority
or other clear statutory basis for making further payments, it has
little choice but to seek a deficiency42 or supplemental appropriation
from Congress, and to adjust or curtail operations as may be
necessary. E.g., B-285725, Sept. 29, 2000; 61 Comp. Gen. 661 (1982);
38 Comp. Gen. 501 (1959). See also B-319009, Apr. 27, 2010 (U.S.
Secret Service violated the Antideficiency Act when it failed to
timely notify Congress of a reprogramming necessitated by conference
report limitations incorporated by reference into the appropriations
act). For example, when the Corporation for National and Community
Service obligated funds in excess of the amount available to it in the
National Service Trust, the Corporation suspended participant
enrollment in the AmeriCorps program and requested a deficiency
appropriation from Congress.[Footnote 43]
Page 6-46 – Replace the last paragraph with the following:
Also, in many situations, the amount of the government’s liability is
not definitely fixed at the time the obligation is incurred. An
example is a contract with price escalation provisions. A violation
would occur if sufficient budget authority is not available when an
agency must adjust a recorded obligation. See also B-318724, June 22,
2010 (an agency violates the Antideficiency Act if adequate budget
authority is not available when the agency adjusts an estimated
obligation); B-240264, Feb. 7, 1994 (an agency would incur an
Antideficiency Act violation if it must adjust an obligation for an
incrementally funded contract to fully reflect the extent of the bona
fide need contracted for and sufficient appropriations are not
available to support the adjustment).
Page 6-48 – Replace the first paragraph with the following:
To illustrate, an agency’s acceptance of an offer to install automatic
telephone equipment for $40,000 when the unobligated balance in the
relevant appropriation was only $20,000 violated the Antideficiency
Act. 35 Comp. Gen. 356 (1955). In addition, when other legislation
limits the availability of an appropriation, the agency may not exceed
the limitation. In B-307720, Sept. 27, 2007, the Department of
Agriculture made payments to participants of the Conservation Security
Program in excess of annual limits on such payments imposed by the
program’s authorizing legislation, 16 U.S.C. § 3838–3838c.
Notwithstanding that the amount of the department’s appropriation was
adequate otherwise to cover the amount of the payments, the department
could not ignore the statutory limitation on such payments.
Page 6-48 – Insert the following after the second paragraph:
In another case, where an agency had insufficient funds for a data
retrieval contract, the agency attempted to incrementally fund the
nonseverable services contract, which was not separated for
performance by fiscal year, without statutory authority to do so. The
agency attempted to avoid obligating the full amount of the contract,
$8.9 million, to the fiscal year current at the time of award, by
inserting an incremental funding clause purporting to limit the
agency’s liability to $2 million at the time it awarded the contract,
the amount available in the current fiscal year appropriation. By so
doing, the agency was trying to avoid an Antideficiency Act violation
by charging its current year obligation to subsequent fiscal years,
which instead resulted in a violation of the bona fide needs rule. B-
317139, June 1, 2009.
Page 6-51 – Replace the first full paragraph with the following:
An agreement to pay “special termination” costs under an incrementally
funded contract creates a firm obligation, not a contingent liability,
to pay the contractor because the contracting agency remains liable
for the costs even if it decides not to fund the contract further. B-
238581, Oct. 31, 1990. See also B-320091, July 23, 2010.
Page 6-53 – Replace the first full paragraph with the following:
The Federal Acquisition Streamlining Act of 1994 (FASA) supplied the “
specific authority of law” missing in Leiter to enable agencies to
enter into multiyear contracts using fiscal year funds.53 The
multiyear contracts provision, codified at 41
U.S.C. § 254c, authorizes executive agencies, using fiscal year funds,
to enter into multiyear contracts (defined as contracts for more than
one but not more than five years) for the acquisition of property or
services. GAO has determined that an agency with independent statutory
leasing authority may use 41 U.S.C. § 254c as the basis for obligating
its fiscal year appropriations to fund multiyear real property leases,
so long as it complies with the terms and conditions set forth in
section 254c. B-316860, Apr. 29, 2009.
Page 6-53 – Replace the last paragraph with the following:
Importantly, FASA does not apply to all contracts that are intended to
meet the needs of more than one fiscal year. Obviously, if multiple
year or no-year appropriations are legally available for the full
contract period, an agency need not rely on FASA. Also, certain
contract forms do not constitute multiyear contracts within the scope
of FASA. For example, in B-302358, Dec. 27, 2004, GAO determined that
a Bureau of Customs and Border Protection procurement constituted an “
indefinite-delivery, indefinite-quantity” (IDIQ) contract that was not
subject to FASA. The decision explained that, unlike a contract
covered by FASA, an IDIQ contract does not obligate the government
beyond its initial year. Rather, it obligates the government only to
order a guaranteed minimum amount of supplies or services. The cost of
that guaranteed minimum amount is recorded as an obligation against
the appropriation current when the contract is entered into.54 See
also B-318046, July 7, 2009 (in the absence of reliable historical
usage data, an agency may use $500 as the guaranteed minimum for IDIQ
contracts, which amount must be obligated at the time of award); B-
308969, May 31, 2007 (agency failed to obligate the entire minimum
amount of an IDIQ contract against the appropriated funds for the
fiscal year in which the contract was awarded).
Page 6-70 – Replace the first full paragraph with the following:
The Federal Circuit reversed in E.I. DuPont De Nemours & Company,
Inc., 365 F.3d 1367. The court did not question the general rule
against open-ended indemnity provisions; nor did it dispute the lower
court’s conclusion that the indemnity clause in the DuPont contract
was originally invalid under that rule. However, the court concluded
that the government in effect ratified the clause through actions
taken under a subsequent statute—-the Contract Settlement Act of 1944,
at 41 U.S.C. §§ 101, 120(a)—-that did permit such indemnity
provisions. Thus, the court reasoned, the indemnity clause in this
case satisfied the “otherwise authorized by law” exception in the
Antideficiency Act, 31 U.S.C. § 1341(a)(1)(B). E.I. DuPont De Nemours
& Company, Inc., 365 F.3d at 1375–80. See also Shell Oil Co. v. United
States, 80 Fed. Cl. 411, 418–20 (2008) (similar indemnity clause in
World War II contracts for the supply of aviation gasoline was
authorized by the First War Powers Act of 1941 and the National
Defense Act of 1916, so the government was liable to reimburse the
contractors for cleanup costs under CERCLA).
Page 6-70 – Insert the following after the first full paragraph:
The Court of Federal Claims applied the rule against open-ended
indemnity agreements in a 2007 case involving a mushroom grower
seeking indemnification from the government for losses it had incurred
as a result of operating a defective waste facility that had been
designed by the Department of Agriculture’s National Resource
Conservation Service (NRCS). Rick’s Mushroom Service, Inc. v. United
States, 76 Fed. Cl. 250 (2007), aff’d, 521 F.3d 1338 (Fed. Cir. 2008).
Pursuant to a cooperative agreement with NRCS, the facility had been
constructed in accordance with detailed plans and specifications
drafted by NRCS. The plaintiff argued that the cooperative agreement
was a contract that created an implied warranty under the rule known
as the Spearin doctrine. The government asserted that the
Antideficiency Act precludes any employee of the NRCS from possessing
the authority to bind the government to “an open-ended indemnity
contract in the absence of specific authorization for the undertaking.”
Id. at 260. The government cited to the statement in Hercules, 516
U.S. at 427–28, that “the contracting officer’s presumed knowledge of
[the Antideficiency Act’s] prohibition [is] strong evidence that the
officer would not have provided, in fact, the contractual
indemnification claimed.” The Federal Claims court in Rick’s Mushroom
agreed, noting that the Supreme Court in Hercules relied upon the fact
that the Comptroller General has repeatedly ruled that government
procurement agencies may not enter into the type of open-ended
indemnity for third-part liability that petitioner claims to have
implicitly received. Rick’s Mushroom, 76 Fed. Cl. at 260. On appeal,
the Federal Circuit affirmed the lower court’s findings and added that “
such an implied indemnification term would indeed be ‘open-ended’
since the amount of the government’s obligation to third parties would
not have been known at the time the parties entered into the cost-
share agreement.” Rick’s Mushroom, 521 F.3d at 1346.
Page 6-70 – Replace the second full paragraph with the following and
insert new footnote number 75a as follows:
Executive branch adjudicative bodies such as boards of contract
appeals and the Federal Labor Relations Authority have also applied
the general anti-indemnity rule.75a See Appeals of National Gypsum
Co., ASBCA No. 53259, 03-1 B.C.A. ¶ 32,054 (2002) (indemnity provision
of World War II contract unenforceable because in violation of the
Antideficiency Act and the Executive Order under which the contract
was entered into); KMS Development Co. v. General Services
Administration, GSBCA No. 12584, 95-2 B.C.A. ¶ 27, 663 (1995) (no
implied-in-fact contract of indemnity since such a contract would be
ultra vires as a violation of the Antideficiency Act); National
Federation of Federal Employees and U.S. Department of the Interior,
35 F.L.R.A. 1034 (1990) (proposal to indemnify union against judgments
and litigation expenses resulting from drug testing program held
contrary to law and therefore nonnegotiable); American Federation of
State, County and Municipal Employees and U.S. Department of Justice,
42 F.L.R.A. 412, 515–17 (1991) (similar proposal for drug testing
indemnification).
Page 6-70 – Insert the following as new footnote number 75a:
75a See also Memorandum Opinion for the Assistant General Counsel for
Administration, Department of Commerce, The Antideficiency Act
Implications of Consent by Government Employees to Online Terms of
Service Agreements Containing Open-Ended Indemnification Clauses, OLC
Opinion, Mar. 27, 2012, available at [hyperlink,
http://www.justice.gov/olc/memoranda-opinions.html]. Online terms of
service (TOS) agreements ask a user to check a box that reads: “I have
read and agree to the Terms of Use.” Many online TOS agreements
incorporate an open-ended indemnification clause, which provides that
the user will hold a Website harmless for all losses incurred. The
Justice Department differentiated between users with and without
authority to bind the government. A government employee with
authority, like a contracting officer, violates the Antideficiency Act
by consenting to an online TOS agreement with an unrestricted, open-
ended indemnification clause. A government employee without authority
does not violate the Antideficiency Act in the same situation,
however, because no binding obligation on behalf of the government was
incurred.
Page 6-80 – Replace the last paragraph with the following:
Other cases illustrating or applying this principle are B-318831, Apr.
28, 2010 (Election Assistance Commission should have charged
obligations for poll worker grants to its salaries and expenses
appropriation instead of its requirements payments appropriation); 57
Comp. Gen. 459 (1978) (grant funds charged to wrong fiscal year); B-
224702, Aug. 5, 1987 (contract modifications charged to expired
accounts rather than current appropriations); and B-208697, Sept. 28,
1983 (items charged to General Services Administration Working Capital
Fund which should have been charged to other operating
appropriations). Actually, the concept of “curing” a violation by
making an appropriate adjustment of accounts is not new. See, e.g., 16
Comp. Dec. 750 (1910); 4 Comp. Dec. 314, 317 (1897). The Armed
Services Board of Contract Appeals also has followed this principle.
New England Tank Industries of New Hampshire, Inc., ASBCA No. 26474,
88-1 BCA ¶ 20,395 (1987).[Footnote 87]
Page 6-82 – Replace the first full paragraph with the following:
The final situation—and from this point on, the law gets a bit murky—
is an obligation or expenditure for an object that is prohibited or
simply unauthorized. In a 2007 memorandum for the General Counsel of
the Environmental Protection Agency, the Justice Department’s Office
of Legal Counsel (OLC) opined that when an agency obligation or
expenditure violates a statutory prohibition on the use of
appropriated funds, the agency violates the Antideficiency Act only if
the prohibition was enacted in the appropriations act from which the
appropriations were obligated. Memorandum for the General Counsel,
Environmental Protection Agency, Use of Appropriated Funds to Provide
Light Refreshments to Non-Federal Participants at EPA Conferences, OLC
Opinion, Apr. 5, 2007. See also Letter from Deputy Assistant Attorney
General, Office of Legal Counsel, to Chief Counsel, Federal Aviation
Administration, Re: Whether the Federal Aviation Administration’s
Finalizing and Implementing of Slot Auction Regulations Would Violate
the Anti-Deficiency Act, Oct. 7, 2008. OLC based its conclusion on the
language in 31 U.S.C. § 1341(a)(1)(A) prohibiting the making or
authorizing of an expenditure or obligation exceeding the amount
available “in an appropriation” for that expenditure or obligation. In
a 2009 opinion, GAO disagreed with OLC’s position because OLC’s focus
on the phrase “in an appropriation” gives it a disproportionate
effect: “When the phrase is read in the context of the entire
provision ... its meaning is apparent: ‘an amount available in an
appropriation’ refers to an amount that Congress has provided to an
agency for some legally permissible purpose.” B-317450, Mar. 23, 2009,
at 5. The reach of the Antideficiency Act extends to all provisions of
law that implicate the use of agency appropriations, which include
both purpose and time limitations. GAO pointed to a number of examples
in the legislative history of the Antideficiency Act recognizing that
the Act would extend to the use of appropriations for unauthorized
purposes and stated: “Nothing in the statutory history or evolution of
the Act suggests that legislated expressions of purpose availability
are less deserving for purposes of the Antideficiency Act if they are
enacted in an authorizing statute or other law rather than in an
appropriations act.” Id. at 7. Consequently, if there are no funds
available because of a statutory prohibition or restriction—-whether
enacted as part of the appropriations act or in other law—-any
obligation or expenditure would be in excess of the amount available
for the obligation or expenditure in violation of the Antideficiency
Act.
The 2009 opinion follows a long line of decisions applying the same
principle. In 60 Comp. Gen. 440 (1981), a proviso in the Customs
Service’s 1980 appropriation expressly prohibited the use of the
appropriation for administrative expenses to pay any employee overtime
pay in an amount in excess of $20,000. By allowing employees to earn
overtime pay in excess of that amount, the Customs Service violated 31
U.S.C. § 1341. The Comptroller General explained the violation as
follows:
“When an appropriation act specifies that an agency’s appropriation is
not available for a designated purpose, and the agency has no other
funds available for that purpose, any officer of the agency who
authorizes an obligation or expenditure of agency funds for that
purpose violates the Antideficiency Act. Since the Congress has not
appropriated funds for the designated purpose, the obligation may be
viewed either as being in excess of the amount (zero) available for
that purpose or as in advance of appropriations made for that purpose.
In either case the Antideficiency Act is violated.”
60 Comp. Gen. at 441.
Page 6-83 – Replace the first full paragraph with the following:
More recent GAO decisions likewise consistently apply the principle
that the use of appropriated funds for unauthorized or prohibited
purposes violates the Antideficiency Act (absent an alternative
funding source) since zero funds are available for that purpose. B-
319009, Apr. 27, 2010 (use of reprogrammed funds in violation of
statutory requirement for congressional notification before obligating
funds); B-302710, May 19, 2004 (use of funds in violation of statutory
prohibition against publicity or propaganda); B-300325, Dec. 13, 2002
(appropriations used for unauthorized technical assistance purposes);
B-300192, Nov. 13, 2002 (violation of appropriation rider prohibiting
use of funds to implement an Office of Management and Budget
memorandum); B-290005, July 1, 2002 (appropriation used to procure
unauthorized legal services); 71 Comp. Gen. 402, 406 (1992)
(unauthorized use of Training and Employment Services appropriation);
B-246304, July 31, 1992 (potential violation of appropriation act “Buy
American” provision); B-248284, Sept. 1, 1992 (nondecision letter)
(reprogramming of funds to an unauthorized purpose). Cf. B-309181,
Aug. 17, 2007 (although the Department of Defense, without a
delegation of lease authority from the General Services
Administration, improperly entered into a lease, it did not incur an
Antideficiency Act violation because it had an appropriation available
to make lease payments).
3. Voluntary Services Prohibition:
Page 6-95 – Insert the following citation at the end of the second
paragraph:
See, e.g., GAO, Food and Drug Administration: Response to Heparin
Contamination Helped Protect Public Health; Controls That Were Needed
for Working With External Entities Were Recently Added, GAO-11-95
(Washington D.C.: Oct. 29, 2010), at 25–32 (Food and Drug
Administration exposed the government to risk of claims from
individuals and entities when it requested and accepted uncompensated
consulting services from them without the execution of a waiver.)
Page 6-98 – Insert the following after the third paragraph:
However, we found that the Denali Commission may not accept waivers of
compensation from its nonfederal commissioners because the rate of
compensation is fixed in statute. B-322832, Mar. 30, 2012.
Nevertheless, many of the commissioners had offered to forego
compensation for their services. GAO said that the Denali Commission
may not accept the offer as it would violate the voluntary services
prohibition of the Antideficiency Act, 31 U.S.C. § 1342.
Page 6-99 – Insert the following at the end of the first paragraph:
More recently, in B-321744, June 23, 2011, GAO held that the Chief
Information Officer of the Federal Election Commission could
simultaneously serve in the statutory position of Staff Director
without additional compensation.
Page 6-102 – Replace the first paragraph with the following:
As noted earlier, 27 Comp. Gen. 194 concerned temporary experts or
consultants. B-139261 concerned civilian volunteers who sought to
provide services for an Air Force reserve center. Likewise, the other
statutory examples cited in B-139261 clearly were aimed at individuals
other than regular federal employees. Thus, 57 Comp. Gen. 423 appears
to represent the sensible caveat that general statutory authorities to
accept voluntary services or “gifts” of services do not supersede
statutes providing for the compensation of federal employees and
cannot be invoked to avoid the consequences of those statutes. Cf. B-
322832, Mar. 30, 2012 (Denali Commission may not accept salary waivers
of nonfederal employees whose compensation is fixed by statute).
Page 6-102 – Insert the following after the first paragraph:
An interesting 2007 case explored the applicability of the voluntary
services prohibition in the context of a recess appointment. B-309301,
June 8, 2007. Exercising his constitutional power to make a recess
appointment, the President appointed an individual as ambassador to
Belgium whose nomination to that same position he had previously
withdrawn from Senate consideration. The individual was denied a
salary by the State Department under 5 U.S.C. § 5503, which prohibits
payment for services:
“to an individual appointed during a recess of the Senate to fill a
vacancy in an existing office, if the vacancy existed while the Senate
was in session and was by law required to be filled by and with the
advice and consent of the Senate, until the appointee has been
confirmed by the Senate.”
Nonetheless, the individual was willing to serve as ambassador, which
raised the question of whether the State Department could accept the
uncompensated services he was willing to provide. GAO noted that the
voluntary services prohibition was enacted to prevent coercive
deficiencies and future equitable claims against the government. Since
there was a statutory prohibition barring the State Department from
paying his salary, this was not a situation in which a coercive
deficiency might occur. Similar to the situation in which an
individual gratuitously waives his salary in advance, the recess
appointee accepted the position knowing that he would not receive
compensation for his services. Id. Even if he were to file a claim
against the government for compensation, there is a statutory
prohibition to payment of his salary. 5 U.S.C. § 5503. Therefore, the
voluntary services prohibition did not apply in this situation, and
the Department of State could allow him to serve as ambassador to
Belgium without compensation. GAO stated: “We are also led to this
interpretation by the fact that serious constitutional issues would
arise if section 5503, in conjunction with the voluntary services
prohibition, were read to directly restrict the President from making
a recess appointment.” B-309301, at 6. See also B-321744, June 23,
2011 (voluntary services prohibition not applicable to employee’s
uncompensated service for one of his two positions because the
uncompensated service is compelled by the dual compensation statute,
31 U.S.C. § 5533).
Page 6-110 – Insert the following after the first partial paragraph
(between “Id. at 7” and “d. Exceptions”):
In a similar case, GAO was asked to review a model no-cost contract
offered by National Conference Services, Inc. (NCSI) for conference,
event, and trade show planning services. The proposed NCSI contract
provided:
“The Contractor [NCSI] may choose to provide for all services as
required by the task order at no cost to the Government. The
Contractor is entitled to all of the registration, exhibition,
sponsorship and/or other fees collected as payment for performance
under the task order if there is no cost to the Government. In this
case, the Contractor is liable for all costs related to the
performance of the task order as defined in the task order and the
government’s liability for payment of services under this task order
is ‘zero.’”
B-308968, Nov. 27, 2007, at 2. GAO found that an agency agreeing to
these terms would have no financial liability to NCSI, nor would NCSI
have any expectation of payment from the government. Applying the same
analysis as in the GSA case, GAO determined that an agency entering
into the NCSI contract would neither augment its appropriation nor run
afoul of the voluntary services prohibition. GAO advised that there
are other considerations beyond compliance with fiscal laws that an
agency should take into account before agreeing to a no-cost contract
such as the one proffered by NCSI, including weighing the value of the
services received from the contractor with that of the concession
given to the contractor. For example, an agency should consider the
ultimate cost to the government as a whole when most attendees are
expected to be government employees. Agency officials also should
consider possible conflicts of interest before signing a no-cost
contract, keeping in mind that control of the agenda, selection of
speakers, and other matters concerning content should serve the
government’s, not the contractor’s, purpose. In addition, agencies
should ensure an open, transparent selection process before entering
into no-cost contracts. GAO said, “Ultimately, an agency must not lose
sight of its objectives for a particular event and should ensure that
in avoiding costs to the agency, it does not take actions that
compromise the effectiveness of its conference, undermine the
achievement of agency goals, or violate ethics rules.” Id. at 5–6.
When an agency accepts gratuitous services, it is important that the
agency, to eliminate the risk of claims against the government, enter
into a written agreement confirming that the services are being
provided without expectation of compensation. GAO found that the Food
and Drug Administration (FDA) exposed the agency to the risk of claims
for payment when it accepted, without a documented agreement,
technical and factual advice from scientists. GAO, Food and Drug
Administration: Response to Heparin Contamination Helped Protect
Public Health; Controls That Were Needed for Working with External
Entities Were Recently Added, GAO-11-95 (Washington, D.C.: Oct. 29,
2010). FDA could have eliminated this risk by obtaining documentation
from the scientists that they expected no compensation and would waive
any future claims against the government for payment for their
services.
Page 6-111 – Insert the following citation at the end of the fourth
paragraph:
See also, GAO-11-95, at 25–32 (Food and Drug Administration exposed
the government to risk of claims from individuals and entities when it
requested and accepted uncompensated consulting services from them
without the execution of a waiver. The fact that such services were
accepted in connection to FDA’s response to the contamination of the
drug heparin did not alleviate that risk).
Page 6-113 – Replace the first full paragraph after the quoted
language with the following:
Recent GAO decisions have considered the emergency exception to 31
U.S.C. § 1342 (including its 1990 amendment) in a context other than a
funding gap. See, e.g., B-310108, Feb. 6, 2008. For example, the
question in B-262069, Aug. 1, 1995, was whether the District of
Columbia could exceed its appropriation for certain programs,
including Aid to Families with Dependent Children and Medicaid,
without violating the Antideficiency Act. The main issue in that
decision was whether the “unless authorized by law exception” to the
Antideficiency Act in 31 U.S.C. § 1341(a)(1)(A) applied. GAO held that
it did not. The decision also noted the existence of the emergencies
exception to 31 U.S.C. § 1342, but held that it was likewise
inapplicable:
“An ‘emergency’ under section 1342 ‘does not include ongoing, regular
functions of government the suspension of which would not imminently
threaten the safety of human life or the protection of property.’ We
are not presently aware of any facts or circumstances that would make
this limited exception available to the District. See, 5 Op. Off.
O.L.C. 1, 7–11 (1981).”
B-262069 at 3, fn. 1.
4. Apportionment of Appropriations:
Page 6-132 – Replace the second full paragraph with the following:
The “emergency” exceptions in section 1515(b)(1)(B) have been
considered in only one GAO decision, although a 1989 internal
memorandum suggested that the exception may apply to Forest Service
appropriations for fighting forest fires. B-230117-O.M., Feb. 8, 1989.
A 2008 decision addressing section 1515 also suggested that fighting
forest fires would be the type of activity that could constitute an
emergency; however, because a deficiency or supplemental appropriation
was not required, the section was not applicable. B-310108, Feb. 6,
2008. GAO stated that it is incumbent on Forest Service officials with
funds control responsibilities, who should be aware of the
apportionment limitation and how close the agency is to exceeding that
limitation, to utilize OMB’s procedures for time-critical
reapportionments by telephoning OMB to request an emergency
reapportionment before the agency exceeds the limitation. Id. See OMB
Cir. No. A-11, at § 120.37.
The emergency exceptions for safety of human life and protection of
property in 31 U.S.C. § 1515(b) appear to be patterned after identical
exceptions in 31 U.S.C. § 1342, so the case law under that section,
some of which is discussed in section C.3.d of this chapter, would
likely be relevant for construing the scope of the exceptions under
section 1515(b). See 5 Op. Off. Legal Counsel 1, 9–10 (1981) (“as
provisions containing the same language, enacted at the same time, and
aimed at related purposes, the emergency provisions of” sections 1342
and 1515(b)(1)(B) “should be deemed in pari materia and given a like
construction”); Memorandum for the General Counsel, United States
Marshals Service, Continuation of Federal Prisoner Detention Efforts
in the Face of a USMS Appropriation Deficiency, OLC Opinion, Apr. 5,
2000 (“we think it clear that, if an agency’s functions fall within §
1342’s exception for emergency situations, the standard for the
‘emergency’ exception under § [1515(b)(1)(B)] also will be met”). See
also Memorandum for the Director, Office of Management and Budget,
Government Operations in the Event of a Lapse in Appropriations, OLC
Opinion, Aug. 16, 1995, at 7, fn. 6.
Page 6-140 – Insert the following after the last paragraph:
In 2008, GAO addressed whether the Forest Service had violated the
Antideficiency Act when it exceeded an apportionment limitation of
$100 million for aviation resources to be used for forest fire
suppression activities. B-310108, Feb. 6, 2008. For fiscal year 2006,
the Forest Service received an appropriation of $1,779,395,000, to
remain available until expended, for wildland fire management. Pub. L.
No. 109-54, title III, 199 Stat. 499, 533 (Aug. 2, 2005). When the
Office of Management and Budget (OMB) apportioned these funds, the
relevant apportionment schedules contained a footnote limiting the
availability of suppression funds for the acquisition of aviation
resources to “not more than $100,000,000.” B-310108, at 4. However,
July turned out to be a catastrophic month for wildland fire activity,
and fire suppression expenditures, including those for aviation
resources, increased significantly. By the end of July, the Forest
Service had obligated approximately $118 million for aviation
resources, thus exceeding the apportionment limitation. GAO concluded
that, despite the emergency nature of the actions, the Forest Service
violated the Antideficiency Act when it incurred obligations for the
acquisition of aviation resources in excess of the $100 million
apportionment limitation. Id. at 6–7.
Page 6-141 – Replace the first paragraph with the following:
Since the Antideficiency Act requires an apportionment before an
agency can obligate the appropriation, 31 U.S.C. § 1512(a), an
obligation in advance of an apportionment violates the Act. See B-
255529, Jan. 10, 1994. In other words, if zero has been apportioned,
zero is available for obligation or expenditure.136 When an agency
anticipates a need to obligate appropriations upon their enactment, it
may request (but not receive) an apportionment before a regular
appropriation or continuing resolution has been enacted. Typically,
for regular appropriation acts, agencies submit their apportionment
requests to OMB by August 21 or within 10 calendar days after
enactment of the appropriation, whichever is later. See OMB Circular
No. A-11, Preparation, Submission, and Execution of the Budget, §
120.30 (Aug. 7, 2009). OMB permits agencies to submit requests on the
day Congress completes action on the appropriation bill. Id. § 120.35.
OMB encourages agencies to begin their preparation of apportionment
requests as soon as the House and Senate have reached agreement on
funding levels (id. § 120.30) and to discuss the proposed request with
OMB representatives (id. § 120.35). OMB will entertain expedited
requests and, for emergency funding needs, may approve the
apportionment request by telephone. Id. § 120.37. See, e.g., B-310108,
Feb. 6, 2008, at 7. For continuing resolutions, OMB typically
expedites the process by making “automatic” apportionments under
continuing resolutions. See B-255529, Jan. 10, 1994; OMB Circ. No. A-
11, § 123.5.
Page 6-143 – Replace the first full paragraph with the following:
For further illustration, see 35 Comp. Gen. 356 (1955) (overobligation
of allotment stemming from misinterpretation of regulations); B-95136,
Aug. 8, 1979 (overobligation of regional allotments would constitute
reportable violation unless sufficient unobligated balance existed at
central account level to adjust the allotments); B-179849, Dec. 31,
1974 (overobligation of allotment held a violation of section 1517(a)
where agency regulations specified that allotment process was the “
principal means whereby responsibility is fixed for the conduct of
program activities within the funds available”); B-114841.2-O.M., Jan.
23, 1986 (no violation in exceeding allotment subdivisions termed
“work plans”); B-242974.6, Nov. 26, 1991 (nondecision memorandum)
(under Defense Department regulations, overobligations of
administrative subdivisions of funds that are exempt from
apportionment do not constitute Antideficiency Act violations). See
also B-318724, June 22, 2010 (for better funds control, agency may
wish to consider providing program managers with administrative
subdivisions of the account that they may not exceed).
5. Penalties and Reporting Requirements:
Page 6-146 – Replace the first full paragraph and insert new footnote
number 138a as follows:
What if GAO uncovers a violation but the agency thinks GAO is wrong?
The agency must still make the required reports, and must include an
explanation of its disagreement. OMB Cir. No. A-11, § 145. See also
GAO, Anti-Deficiency Act: Agriculture’s Food and Nutrition Service
Violates the Anti-Deficiency Act, GAO/AFMD-87-20 (Washington, D.C.:
Mar. 17, 1987). Should an agency fail to make the required report
within a reasonable period of time, GAO will advise Congress that the
agency violated the Antideficiency Act but has not yet reported the
violation. See B-308715, Nov. 13, 2007.[Footnote 138a]
Page 6-146 – Insert the following as new footnote number 138a:
[138a] GAO advised Congress that the Department of Energy (DOE) had
violated the Antideficiency Act in fiscal years 2006 and 2007 but had
not reported the violations to Congress more than six
months after GAO found the violations. Subsequently, two months after
GAO notified Congress, the department made the required reports and
provided copies to GAO. Letter from the Secretary, DOE, to the
Comptroller General of the United States, Jan. 14, 2008.
D. Supplemental and Deficiency Appropriations:
Page 6-162 – Replace the first full paragraph with the following:
A supplemental appropriation also may add funds to a lump-sum
appropriation for a specific object. If the original lump-sum
appropriation is also available for that specific object, both the
lump-sum appropriation and the supplemental appropriation are
available for that object. B-322062, Dec. 5, 2011. However, if the
original appropriation was not available for that object, then the
supplemental amounts to a new appropriation, that is, in effect,
distinct from the lump-sum appropriation. For example, the fiscal year
1957 supplemental appropriation for the Maritime Administration
provided $18 million for a nuclear-powered merchant ship under the
heading “ship construction.” Funds for the nuclear-powered ship had
been under the regular “ship construction” lump-sum appropriation for
fiscal year 1957, but had been denied. Under the circumstances, the
Comptroller General found that the supplemental appropriation amounted
to a specifically earmarked maximum for the vessel, and that the
agency could not exceed the $18 million by using funds from the
regular appropriation. 36 Comp. Gen. 526 (1957).
E. Augmentation of Appropriations:
2. Disposition of Moneys Received: Repayments and Miscellaneous
Receipts:
Page 6-170 – Replace the first bulleted paragraph with the following:
* An agency may retain moneys it receives if it has statutory
authority to do so. In other words, the requirement to deposit such
funds into the general fund of the Treasury will not apply. E.g., 72
Comp. Gen. 164, 165–66 (1993) and cases cited.157 However, the
requirement for deposit “as soon as practicable without deduction for
any charge or claim” applies whether the correct account for deposit
is the general fund of the Treasury or some other account authorized
by statute. B-321387, Mar. 30, 2011, at 11 and cases cited.
Page 6-170 – Insert the following before the second full paragraph:
Failure to comply with a statutory exception may also constitute a
violation of 31 U.S.C. § 3302(b). An example of this is B-321387, Mar.
30, 2011. In that decision, GAO found that a lessee’s deposit of cash
rent payments into an escrow account under the control of the
Department of the Army rather than into a special account in the
Treasury, as required by 10 U.S.C. § 2667(e), constituted a violation
of 31 U.S.C. § 3302(b).
Page 6-170 – Replace footnote number 157 with the following:
[157] In addition to instances described elsewhere in the text, the
following are examples of statutory exceptions to section 3302(b): 10
U.S.C. § 2667(e)(1)(A)(i) (money rentals received pursuant to certain
leases entered into under 10 U.S.C. § 2667(a)), discussed in B-321387,
Mar. 30, 2011; 39 U.S.C. § 410(a) (revenue of the United States Postal
Service and its components in the general exercise of its powers),
discussed in B-317022, Sept. 25, 2008; 42 U.S.C. § 8287 (measured
savings from energy savings performance contracts), discussed in B-
287488, June 19, 2001; 42 U.S.C. § 8256 and note (rebates received by
federal agencies from utility companies on account of energy-saving
measures), discussed in B-265734, Feb. 13, 1996; and 38 U.S.C. § 1729A
(compensatory settlement amounts under the Federal Medical Care
Recovery Act stemming from care provided at Department of Veterans
Affairs facilities), discussed in Memorandum Opinion for the Assistant
Attorney General, Civil Division, Miscellaneous Receipts Act Exception
for Veterans’ Health Care Recoveries, OLC Opinion, Dec. 3, 1998.
Page 6-172 – Insert the following after the first full paragraph:
In B-305402, Jan. 3, 2006, GAO refused to classify as a refund an
amount that did not represent the return of an overpayment to the
agency. That case concerned the proper treatment of demutualization
compensation that the National Aeronautics and Space Administration
(NASA) received from its contractor, California Institute of
Technology (Caltech). Caltech had received the demutualization
compensation in the form of stock as a policyholder of Prudential Life
Insurance Company policies that Caltech held for some employees
operating the Jet Propulsion Laboratory for NASA. Caltech notified
NASA of the compensation, and NASA instructed Caltech to liquidate the
stock and place the proceeds in an interest-bearing account. GAO found
that these proceeds do not constitute a refund that NASA could credit
to its appropriation because they do not represent a repayment of
funds that were “in excess of what was actually due”; that is, the
proceeds do not reflect a repayment from Caltech of an amount that
NASA had previously overpaid Caltech. At the time NASA paid allocable
costs of the defined benefit retirement plan, the amounts were
correct, and the fact that the moneys NASA received as a result of the
demutualization are related to the terminated retirement plans does
not make the proceeds a refund. Since the demutualization compensation
cannot be properly characterized as a refund, the proceeds from the
sale of the demutualization compensation must be deposited in the
general fund of the Treasury as miscellaneous receipts.
Page 6-173 – Replace the first full paragraph (after the quoted
language) with the following:
B-302366, at 5. In this regard, the decision rejected the department’s
suggestion that the interest payment could be regarded as merely
restoring the appropriation to an amount adjusted for inflation. The
decision noted that Congress does not appropriate on a net present
value basis. Likewise, GAO has held that agencies may retain and
credit to their appropriations refunds in the form of recoveries under
the False Claims Act (31 U.S.C. § 3729) to the extent that they
represent compensatory damages to reimburse erroneous payments, but
not “exemplary” damages in the nature of penalties. B-281064, Feb. 14,
2000; 69 Comp. Gen. 260 (1990). See also B-310725, May 20, 2008 (the
Inspector General (IG) of the National Science Foundation may not
credit to its appropriation amounts recovered by the Justice
Department under the False Claims Act to reimburse investigative costs
incurred by the IG’s office that are specifically provided for in its
appropriation).
Page 6-176 – Replace the fourth full paragraph with the following:
The deposit timing requirements of 31 U.S.C. § 3302(c) and the
implementing Treasury regulations apply as well when public moneys are
held by nonfederal custodians. Thus, GAO found that these requirements
were violated where the Department of Veterans Affairs (VA) allowed
contractors to hold payments it collected on VA loans in an interest-
bearing account for 30 days or more before transferring the payments
to the Treasury. See GAO, Internal Controls: VA Lacked Accountability
Over Its Direct Loan and Loan Sale Activities, GAO/AIMD-99-24
(Washington, D.C.: Mar. 24, 1999), at 16–18. See also B-305402, Jan.
3, 2006 (the National Aeronautics and Space Administration should have
deposited amounts received from its contractor in the Treasury the day
following the receipt of those amounts).
Page 6-177 – Replace the partial paragraph after the quoted language
with the following:
B-303413, Nov. 8, 2004. See also B-300826, Mar. 3, 2005, at 6, noting
that an agency cannot avoid section 3302(b) by authorizing a
contractor to charge fees to outside parties and keep the payments in
order to offset costs that would otherwise be borne by agency
appropriations. The decision in B-300826 was affirmed in B-306663,
Jan. 4, 2006. See also B-307137, July 12, 2006 (the Department of
Energy (DOE) violated 31 U.S.C. § 3302(b) and augmented its
appropriations when it authorized the United States Enrichment
Corporation to hold, invest, and use the proceeds from public sales of
government-owned uranium on behalf of DOE prior to the enactment of
specific statutory authority exempting the proceeds of those uranium
sales from section 3302(b)).
Page 6-181 – Replace the last paragraph with the following:
In a recent decision, GAO considered whether an agency improperly
avoided the miscellaneous receipts statute by structuring a regulatory
action so that money would not be owed to the government. B-303413,
Nov. 8, 2004. The Federal Communications Commission proposed to
provide spectrum rights to a private company through a “license
modification” in which the company would not pay the government for
the spectrum but would pay certain costs incurred by it and other
spectrum users. If the Communications Act of 1934, as amended, at 47
U.S.C. § 309(j), required the Commission to license the spectrum
through auction instead of a license modification, then the Commission’
s proposed regulatory action would improperly avoid the government’s
receipt of money otherwise owed to it and thus would violate the
miscellaneous receipts statute. GAO found the Commission’s proposed
regulatory action to be within the scope of its authority under the
Communications Act, at 47 U.S.C. § 316(a)(1), and concluded that the
license modification did not violate the miscellaneous receipts
statute.
Page 6-182 – Insert the following citation after the end of the first
full paragraph:
See also B-321729, Nov. 2, 2011 (funds received by the federal
government on behalf of a private party in the settlement of two
litigation actions do not represent “money for the government,” and
such funds may be disbursed to the private party without the need for
an appropriation).
Page 6-183 – Insert the following after the first full paragraph:
A recent situation involved fees collected by a government
corporation. Congress established the State Justice Institute as a
private, nonprofit corporation to further “the development and
adoption of improved judicial administration in State courts in the
United States.” 42 U.S.C. § 10702(a). Although the Institute receives
an annual appropriation from Congress, the Institute is not a
government agency or instrumentality except for limited purposes
specified in its authorizing statute, and its employees are not to be
considered employees of the United States. 42 U.S.C. § 10704. The
Executive Director of the Institute asked whether the Institute could
retain fees the Institute obtains for the use of advertising space in
its semiannual newsletter, or whether the fees must be treated as
miscellaneous receipts under 31 U.S.C. § 3302(b) and deposited in the
Treasury. The Institute is not a government agency, and GAO stated
that “although Congress imposed on the Institute certain requirements
typically applicable to a federal agency, it did so selectively,
against the general backdrop of a private corporate entity. 42 U.S.C.
§ 10702(a).” B-307317, Sept. 13, 2006, at 3. GAO found nothing
explicitly or implicitly in the Institute’s authorizing statute that
would suggest or require application of the miscellaneous receipts
statute to the Institute. Therefore, GAO concluded that in accepting
the advertising fees the Institute was not “receiving money for the
Government,” and so the Institute could retain the fees without
violating the miscellaneous receipts statute. Id. (GAO cautioned,
however, that in retaining such fees the Institute should be cognizant
of the legal constraints and policy considerations regarding
advertising it chooses to carry).
Page 6-197 – Replace the last partial paragraph with the following:
The decision in B-302962 held that the exception to the
interdepartmental waiver doctrine applied in the case of damage to
facilities of the National Archives and Records Administration (NARA)
whose operations were financed by a revolving fund. Thus, NARA should
collect from other federal agencies, their contractors, or NARA’s own
contractors, as the case may be, amounts sufficient to repair damages
they caused to NARA’s facilities and deposit those amounts into the
revolving fund.
In other circumstances, however, GAO concluded that NARA’s funds were
available to cover the damage. In B-308822, May 2, 2007, a building
failure caused water damage to records NARA stored for its federal
agency customers in a federal building owned and maintained by the
General Services Administration (GSA). Here, the Federal Property
Administrative Services Act of 1949, as amended, governs the
relationship between GSA and its federal agency customers who occupy
GSA-owned and operated buildings. Both GSA’s management of federal
buildings and NARA records centers operate out of revolving funds.
Requiring GSA to reimburse another agency for damages it incurred or
reduce the rental charges to cover the damages would reduce amounts
available to finance new construction, undermining one of the purposes
of the Act. Accordingly, GAO concluded that GSA was not required to
reimburse NARA for property damage.
Page 6-199 – Replace the second paragraph with the following:
Federal agencies must have statutory authority both (1) to charge fees
for their programs and activities in the first instance and (2), even
if they have fee-charging authority, to retain in their appropriations
and use the amounts collected. See, e.g., B-306663, Jan. 4, 2006; B-
300826, Mar. 3, 2005; B-300248, Jan. 15, 2004. Thus, fees and
commissions paid either to the government itself or to a government
employee for activities relating to official duties must be deposited
in the Treasury as miscellaneous receipts, absent statutory authority
to the contrary.
Page 6-199 – Replace the last paragraph with the following:
Of course, if and to the extent expressly authorized by statute an
agency may retain fees and use them to offset operating costs. See,
e.g., 2 U.S.C. § 68-7(b) (fees and other charges collected for
services provided by the Senate Office of Public Records); 7 U.S.C. §
7333(k)(3) (fees for certain services collected by the Commodity
Credit Corporation); 10 U.S.C. § 2262 (fees collected from
participants to defray Department of Defense costs of hosting
conferences); 28 U.S.C. § 1921(e) (fees collected by the United States
Marshals Service for service of civil process and judicial execution
seizures and sales, to the extent provided in advance in appropriation
acts); 28 U.S.C. § 1931 (specified portions of filing fees paid to the
clerk of court). The relevant legislation will determine precisely
what may be retained. E.g., 34 Comp. Gen. 58 (1954). For example,
amounts collected under 10 U.S.C. § 2262 with respect to a
Department of Defense-hosted conference can be credited to the
appropriation from which the costs of the conference are paid to
reimburse the Department for the costs incurred, but if the amount
collected ends up being greater than the actual costs of the
conference, the excess amount is to be deposited into the Treasury as
miscellaneous receipts. 10 U.S.C. §§ 2262(b), (c).
Page 6-202 – Replace footnote number 177 with the following:
[177] See section B.1 of Chapter 15 for a more detailed discussion of
the Economy Act. Chapter 15 also discusses a variety of other
interagency ordering authorities including working capital funds,
special revolving funds, franchise funds, and program-specific funds.
Note however that, where one agency has a specific statutory direction
to transfer funds appropriated to that agency to another agency, these
transfers should not be made using Economy Act agreements. B-319189,
Nov. 12, 2010.
Page 6-212 – Insert the following after the first paragraph:
In B-306860, Feb. 28, 2006, GAO concluded that the terms of a
settlement agreement entered into between the Office of Federal
Housing Enterprise Oversight (OFHEO) and the Federal Home Loan
Mortgage Corporation (Freddie Mac) would not augment OFHEO’s
appropriation. In this case, the settlement agreement was intended to
resolve an administrative proceeding, including production of
documents, brought by OFHEO against Freddie Mac pursuant to OFHEO’s
regulatory oversight authority. As part of the settlement, Freddie Mac
agreed to provide the documents and to pay a vendor up to $1
million to electronically format and code certain documents for OFHEO’
s use. The settlement agreement satisfied a prosecutorial objective,
that is, the production of documents, and there was no contractual
relationship between OFHEO and the vendor. Instead, the contract was
between Freddie Mac and the vendor, and it was Freddie Mac, not OFHEO,
who was contractually obligated to pay the vendor. Thus, the costs of
formatting the documents were Freddie Mac’s costs and not OFHEO’s, and
Freddie Mac’s payment of the formatting costs did not constitute a de
facto augmentation of OFHEO’s appropriation.
The OFHEO decision was explained in B-308476, Dec. 20, 2006, in
which GAO determined that the Federal Motor Carrier Safety
Administration (FMCSA) did not have authority to retain an award of
criminal restitution that a federal district court ordered to be paid
to FMCSA. In carrying out its mission to improve the safety of
commercial vehicle operations, FMCSA issues and enforces motor carrier
safety regulations concerning specified commercial trucking and bus
operations. See 49 U.S.C. § 113. A trucking company’s officers pleaded
guilty to violating both the agency regulations and a criminal statute
concerning conspiracy to commit false statement offenses. In accepting
the plea, the court ordered, among other penalties, the defendants to
pay restitution to FMCSA in the amount of $20,000 to compensate FMCSA
for the costs of the investigation and prosecution of the case. Unlike
the situation in the OFHEO case, if FMCSA retained the $20,000 in
restitution, the agency would improperly augment its appropriation.
FMCSA receives an appropriation each year to pay for costs of
investigations such as the one conducted in the trucking company’s
case—such costs are necessary expenses of enforcing the agency’s
safety regulations and are obligations of FMCSA. As such, crediting
the restitution award to FMCSA’s appropriation would improperly
contribute financial resources that supplement those already provided
for the agency by Congress. Therefore, FMCSA was required to remit the
awarded funds to the Treasury as miscellaneous receipts. See also B-
310725, May 20, 2008 (amounts recovered pursuant to the False Claims
Act to reimburse investigative costs incurred by the Inspector General
(IG) of the National Science Foundation should be deposited into the
Treasury as miscellaneous receipts because Congress appropriates a
specific amount to the IG to cover these investigative costs).
Page 6-214 – Insert the following after the first full bullet at the
top of the page:
* Proceeds from the sale of government-owned uranium used to
compensate the United States Enrichment Corporation (USEC) for
expenses it incurred on behalf of the Department of Energy (DOE).
Here, DOE arranged for an independent revenue stream not appropriated
to it by Congress; had no authority to retain the proceeds of that
revenue stream if received directly; and arranged for its agent, USEC,
to receive the proceeds of the unauthorized revenue stream and use
those amounts to pay for expenses incurred on behalf of DOE. As DOE’s
agent, USEC received “money for the government” but failed to deposit
the money in the Treasury. Therefore, DOE violated the miscellaneous
receipts statute and augmented its appropriations. B-307137, July 12,
2006.
Page 6-218 – Replace the second paragraph with the following:
Examples of cases in which use of the “Moneys Erroneously Received and
Covered” appropriation was found authorized are Reynolds v. Alabama
Department of Transportation, Civ. A. No. 2:85cv665-MHT (M.D. Ala.
Jan. 2, 2008) (contempt fines collected incident to a consent decree
erroneously deposited to the U.S. Treasury miscellaneous receipts
account by the Clerk of Court; funds returned to the court’s
registry); 71 Comp. Gen. 464 (1992) (refund to investment company of
late filing fee upon issuance of order by Securities and Exchange
Commission exempting company from filing deadline for fiscal year in
question); 63 Comp. Gen. 189 (1984) (Department of Energy deposited
overcharge recoveries from oil companies into general fund instead of
first attempting to use them to make restitution refunds); B-217595,
Apr. 2, 1986 (interest collections subsequently determined to have
been erroneous).
3. Gifts and Donations to the Government:
Page 6-224 – Replace the first full paragraph with the following:
A number of departments and agencies have statutory authority to
accept gifts. A partial listing is contained in B-149711, Aug. 20,
1963 (although dated, B-149711 is still useful since there is no more
recent comprehensive compilation of these authorities). The statutory
authorizations contain varying degrees of specificity as to precisely
what may be accepted (money, property, services, etc.). For example,
the State Department’s general gift statute, 22 U.S.C. § 2697,
authorizes the State Department to accept gifts of money or property,
real or personal, and, in the Secretary’s discretion, conditional
gifts. Compare B-319246, Sept. 1, 2010 (the Denali Commission has
statutory authority to accept gifts but this authority does not
specify, and therefore does not extend to, conditional gifts). A case
discussing 22 U.S.C. § 2697 is 67 Comp. Gen. 90 (1987) (United States
Information Agency may accept donations of radio programs prepared by
private syndicators for broadcast over Voice of America facilities).
Another is 70 Comp. Gen. 413 (1991) (United States Information Agency
may accept donations of foreign debt). Authority to accept voluntary
services does not include donations of cash. A-86115, July 15, 1937; A-
51627, Mar. 15, 1937. For a further discussion of voluntary services,
see section C.3 of this chapter.
4. Other Augmentation Principles and Cases:
Page 6-239 – Insert the following after the third bullet:
* The Office of Compliance may not accept reimbursements of its costs
of investigating and prosecuting alleged violations of section 5 of
the Occupational Safety and Health Act (29 U.S.C. § 654), and its
costs of monitoring planned abatement actions, from legislative branch
agencies since the Office of Compliance receives an annual
appropriation to fund these activities. B-308774, Mar. 15, 2007.
* The Pension Benefit Guaranty Corporation may not retain a
reimbursement for financial analysis services associated with a
request for waiver from claims arising under title IV of the Employee
Retirement Income Security Act. B-307849, Mar. 1, 2007. The
miscellaneous receipts statute, 31 U.S.C. § 3302(b),
requires government corporations to deposit amounts received into the
general fund of the Treasury, absent statutory authority to the
contrary. Id.
[End of section]
Chapter 7: Obligation of Appropriations:
B. Criteria for Recording Obligations (31 U.S.C. § 1501):
1. Section 1501(a)(1): Contracts:
Page 7-10 – Replace the partial paragraph at the bottom of the page
with the following and insert new footnote number 6a as follows:
An agreement must be legally binding (offer, acceptance,
consideration, made by authorized official[Footnote 6a]).
Page 7-10 – Insert the following as new footnote number 6a:
6a A government employee with authority to bind the government, like a
contracting officer, violates the Antideficiency Act by consenting to
an online terms of service agreement with an unrestricted, open-ended
indemnification clause. A government employee without authority does
not violate the Antideficiency Act in the same situation, however,
because no binding obligation on behalf of the government was
incurred. Memorandum Opinion for the Assistant General Counsel for
Administration, Department of Commerce, The Antideficiency Act
Implications of Consent by Government Employees to Online Terms of
Service Agreements Containing Open-Ended Indemnification Clauses, OLC
Opinion, Mar. 27, 2012, available at [hyperlink,
http://www.justice.gov/olc/memoranda-opinions.html].
Page 7-18 – Replace the last paragraph with the following:
Claims against the government resulting from unauthorized commitments
raise obligation questions in two general situations. If the
circumstances surrounding the unauthorized commitment are sufficient
to give rise to a contract implied-in-fact, it may be possible for the
agency to ratify the unauthorized act. If the ratification occurs in a
subsequent fiscal year, the obligation is chargeable to the prior
year, that is, the year in which the need presumably arose and the
claimant performed. B-208730, Jan. 6, 1983. See also B-317413, Apr.
24, 2009. However, before an agency chooses to ratify the obligation,
it first must assure that sufficient prior year unobligated funds
remain available to cover the ratification. Id.; B-290005, July 1,
2002. If ratification is not available for whatever reason, the only
remaining possibility for payment is a quantum meruit recovery under a
theory of contract implied-in-law. The quantum meruit theory permits
payment in limited circumstances even in cases where there was no
valid obligation, for example, where the contractor has made partial
delivery operating under what he believed to be a valid contract. B-
303906, Dec. 7, 2004; B-251668, May 13, 1993; B-118428, Sept. 21,
1954. See also 67 Comp. Gen. 507 (1988). The obligational impact is
the same as for ratification— payment is chargeable to the fiscal year
in which the claimant performed. B-210808, May 24, 1984; B-207557,
July 11, 1983.
Page 7-21 – Replace first full paragraph with the following:
What does all this signify from the perspective of obligating
appropriations? As we noted at the outset, the obligational impact of
a variable quantity contract depends on exactly what the government
has bound itself to do. A fairly simple generalization can be deduced
from the decisions: In a variable quantity contract (requirements or
indefinite-quantity), any required minimum purchase must be obligated
when the contract is executed; subsequent obligations occur as work
orders or delivery orders are placed, and are chargeable to the fiscal
year in which the order is placed. B-308969, May 31, 2007 (agency
should have obligated the $1 million required minimum purchase under
an IDIQ contract against the appropriation for the fiscal year in
which the contract was executed). See also B-302358, Dec. 27, 2004. Of
course, the bona fide needs rule applies both at the time the agency
enters into the contract (i.e., the agency must have a bona fide need
for the guaranteed minimum in the IDIQ contract) and when the agency
subsequently places task or work orders. B-318046, July 7, 2009. (For
more on the bona fide needs rule, see Chapter 5, section B.)
Page 7-23 – Replace the first full paragraph with the following:
As noted previously, where the precise amount of the government’s
liability is defined at the time the government enters into the
contract, that is the amount to be recorded against funds available at
the time of contract execution. For example, in the simple firm fixed-
price contract, the contract price is the recordable obligation.
Statutory authority to record an obligation at the time of contract
execution for an amount less than the full amount of the government’s
contractual obligation must be explicit. B-322160, Oct. 3, 2011; B-
195260, July 11, 1979. For example, the Securities and Exchange
Commission (SEC), using no-year appropriations, entered into a
multiyear lease for real property. Without authority otherwise, SEC
was required to record an obligation at the time it signed the lease
for the government’s total liability under the terms of the lease. B-
322160. When an agency uses the Federal Acquisition Streamlining Act
or other similar authority, that authority may permit the agency to
obligate its appropriations differently. We discuss the Federal
Acquisition Streamlining Act and other examples of multiyear
contracting authorities in section B.9 of Chapter 5.
For many types of obligations, the precise amount of the government’s
liability cannot be known at the time the liability is incurred. As
summarized in our preliminary discussion of 31 U.S.C. § 1501(a), some
initial amount must still be recorded. See, e.g., B-321296, July 13,
2011 (NLRB properly recorded an obligation representing an estimate,
based on past practices and trends, of the total amount of court
reporting services it would need under a particular contract). The
agency should then adjust this initial obligation up or down
periodically, as more precise information becomes available.12
Page 7-27 – Insert the following after the first partial paragraph:
A recent case reaffirmed that an agency decision to rely on estimated
obligations did not relieve it of responsibility for complying with
fiscal laws. B-318724, June 22, 2010. In fiscal year 2008, the Army
used estimates to monitor the budget execution of many personnel
expenses. After the end of the fiscal year, the Army identified a $200
million shortfall in its personnel appropriation and had to transfer
funds into the account to cover its obligations. GAO explained that
the Army had available to it either the exact or highest amount for
each obligation at the time it was incurred. The Army failed to take
the necessary steps to ensure that it had adequate budget authority
and, consequently, violated the Antideficiency Act. Id.
Page 7-27 – Replace the first full paragraph with the following:
The core issue in many of the previously discussed cases has been when
a given transaction ripens into a recordable obligation, that is,
precisely when the “definite commitment” occurs. Many of the cases do
not fit neatly into categories. Rather, the answer must be derived by
analyzing the nature of the contractual or statutory commitments in
the particular case. See, e.g., B-320091, July 23, 2010 (with a cost
reimbursement contract, an agency incurs, and must record, an
obligation for the full amount it committed to in the contract’s
“limitation of funds” clause; the agency incurs a new obligation,
recordable against a current appropriation, if it modifies the
contract, increasing the cost ceiling of the “limitation of funds”
clause).
Page 7-27 – Insert the following after the last paragraph:
Another case involved the proper obligation of a settlement executed
in fiscal year 2007 of cost overruns incurred in fiscal year 2006 as a
result of an unauthorized contract modification during the performance
of a contract. The agency charged the settlement amount to its fiscal
year 2006 appropriation. GAO disagreed, however, concluding that the
settlement created a new obligation in fiscal year 2007 and should
have been charged against the agency’s fiscal year 2007 appropriation.
B-317413, Apr. 24, 2009.
Page 7-28 – Replace the last paragraph with the following including
the reference to new footnote number 16a:
It is not uncommon for federal agencies to provide goods or services
to other federal agencies. Section 1501 addresses these interagency
transactions in two places. Subsection (a)(3) addresses interagency
orders required by law.16a We discuss these transactions in section
B.3 of this chapter. Subsection (a)(1) addresses the obligational
requirements of all other interagency transactions: “a binding
agreement between an agency and another person (including an agency)”
(emphasis added). To distinguish these other transactions from those
required by law, these transactions are often referred to as “
voluntary orders.” This section discusses voluntary orders. Because
voluntary orders are covered by section 1501(a)(1), obligations for
many voluntary orders are recorded in the same manner as for
contracts. However, the authority that governs the interagency
transaction, not contract practices, determines the obligational
treatment of a voluntary order.
Page 7-28 – Insert the following as new footnote number 16a:
[16a] Interagency transactions required by law should not be confused
with statutory directions for one agency to transfer funds to another
agency. See B-319189, Nov. 12, 2010.
Page 7-31 – Replace the second full paragraph with the following:
The Army Corps of Engineers entered into agreement with Department of
Housing and Urban Development (HUD) to perform flood insurance studies
pursuant to orders placed by HUD. Since the agreement presumably
required the Corps to perform as HUD placed the orders, a recordable
obligation would arise when HUD placed an order under the agreement.
Since the agreement was authorized by the National Flood Insurance
Act,19 rather than the Economy Act, funds obligated by an order would
remain obligated even though the Corps did not complete performance
(or contract out for it) until following the fiscal year. B-167790,
Sept. 22, 1977. See also B-318425, Dec. 8, 2009 (the Chemical Safety
and Hazard Investigation Board’s appropriation is not available to
fund a proposed interagency agreement for identity cards and related
maintenance services because the agreement did not specify a period of
performance for the agreement, thus creating an open-ended
obligation); B-317249, July 1, 2009 (because an order submitted
through the General Services Administration’s AutoChoice Summer
Program is not finalized until October, the Natural Resources
Conservation Service (NRCS) does not incur an obligation until
October; NRCS may not obligate the appropriation current when it
submits the order).
5. Section 1501(a)(5): Grants and Subsidies:
Page 7-41 – Replace the first full paragraph with the following:
Applying the above principles, the Comptroller General found that a
document entitled “Approval and Award of Grant” used by the Economic
Development Administration was sufficient for recording grant
obligations under the local public works program because it “reflects
the Administration’s acceptance of a grant application; specifies the
project approved and the amount of funding; and imposes a deadline for
affirmation by the grantee.” B-126652, Aug. 30, 1977. See also B-
316372, Oct. 21, 2008 (similar language in a financial assistance
award had the same key terms that established an obligation). Once the
appropriation has been properly obligated, performance by the grantee
and the actual disbursement of funds may extend beyond the period of
obligational availability. B-300480, Apr. 9, 2003, aff’d, B-300480.2,
June 6, 2003; B-289801, Dec. 30, 2002; 31 Comp. Gen. 608, 610 (1952);
20 Comp. Gen. 370 (1941); B-37609, Nov. 15, 1943; B-24827, Apr. 3,
1942; B-124374-O.M., Jan. 26, 1956.
Page 7-41 – Replace the last partial paragraph with the following:
In other situations, the obligating action for purposes of 31 U.S.C. §
1501(a)(5)(A) may take place by operation of law under a statutory
formula grant or by virtue of actions authorized by law to be taken by
others that are beyond the control of the agency (even when the
precise amount of the obligation is not determined until a later
time). When this occurs, the documentary evidence used to support the
accounting charge against the appropriation is a reflection of, not
the creation of, the obligation under the particular law and usually
is generated subsequent to the time that the actual obligation arose.
63 Comp. Gen. 525 (1984); B-164031(3).150, Sept. 5, 1979. Thus where
an agency is required to allocate funds to states on the basis of a
statutory formula, the formula establishes the obligation to each
recipient rather than the agency’s allocation since, if the allocation
is erroneous, the agency must adjust the amounts paid each recipient.
41 Comp. Gen. 16 (1961); B-164031(3).150, Sept. 5, 1979. See also B-
316915, Sept. 25, 2008 (under a statutory program to provide funds to
states to assist in the administration of federal elections, a
precondition that a state certify to the agency compliance with
various requirements does not affect the fact that the payments are
“required to be paid” within the meaning of 31 U.S.C. § 1501(a)(5)(a)
and are thus obligated by operation of law, since the state may
fulfill the precondition and be entitled to receipt of the funds
through no actions on the part of the agency).
Page 7-42 – Insert after the first full paragraph:
If a grant award is vacated because of a defect in the competitive
selection process, the amounts originally obligated remain available
to fund a valid “replacement grant.” B-322628, Aug. 3, 2012.
Replacement grants are a continuation of the original obligation,
rather than a new obligation. Id.
7. Section 1501(a)(7): Employment and Travel:
Page 7-46 – Replace the third paragraph with the following:
For persons compensated on an actual expense basis, it may be
necessary to record the obligation as an estimate, to be adjusted when
the services are actually performed. Documentation requirements to
support the obligation or subsequent claims are up to the agency. For
example, the National Mediation Board (NMB) incurs an obligation when
it appoints a neutral arbitrator to a grievance adjustment board to
hear a specific case or a specified group of related cases. Because
NMB does not control the number of days an arbitrator will work before
submitting an award, NMB should record an obligation based on its best
estimate of the costs of paying the arbitrator and adjust the
obligation up or down as more information becomes available. B-305484,
June 2, 2006. NMB should liquidate the obligation from the
appropriation current at the time NMB incurs the obligation,
notwithstanding that the arbitrator’s performance may extend into the
next fiscal year. Id. To the extent GAO indicated in two prior
decisions, B-217475, Dec. 24, 1986, and B-217475, May 5, 1986, that
NMB may record obligations month-to-month based on the anticipated
expenditures it approves in monthly compensation requests, those
decisions were overruled by B-305484.
Page 7-47 – Replace the second full paragraph with the following:
Bonuses such as performance awards or incentive awards obligate
appropriations current at the time the awards are made. Thus, for
example, where performance awards to Senior Executive Service
officials under 5 U.S.C. § 5384 were made in fiscal year 1982 but
actual payment had to be split between fiscal year 1982 and fiscal
year 1983 to stay within statutory compensation ceilings, the entire
amount of the awards remained chargeable to fiscal year 1982 funds. 64
Comp. Gen. 114, 115 n. 2 (1984). The same principle would apply to
other types of discretionary payments; the administrative
determination creates the obligation. See, e.g., B-318724, June 22,
2010; B-80060, Sept. 30, 1948.
Page 7-52 – Replace the third full paragraph with the following:
The leading case on the obligation of employee transfer expenses is 64
Comp. Gen. 45 (1984). The rule is that “for all [reimbursable] travel
and transportation expenses of a transferred employee, the agency
should record the obligation against the appropriation current when
the employee is issued travel orders.” 64 Comp. Gen. at 48. See also B-
318724, June 22, 2010. This treatment applies to expenses stemming
from employee transfers; it does not apply to expenses stemming from
temporary duty. 70 Comp. Gen. 469 (1991).
C. Contingent Liabilities:
Page 7-56 – Replace the second full paragraph with the following:
Contingent liabilities are not recordable as obligations under section
1501 of title 31.34 Rather, a contingent liability ripens into a
recordable obligation for purposes of section 1501 only if and when
the contingency materializes. E.g., B-305484, June 2, 2006; 62 Comp.
Gen. 143, 145–46 (1983); 37 Comp. Gen. 691–92 (1958); GAO, Policy and
Procedures Manual for Guidance of Federal Agencies, title 7, § 3.5.C
(Washington, D.C.: May 18, 1993) (hereafter GAO-PPM).
E. Deobligation:
Page 7-59 – Replace the bulleted paragraph with the following:
Liquidation in amount less than amount of original obligation. E.g., B-
321297, Aug. 2, 2011 (statute required agency to offset any civil
penalties collected as a result of an audit against amounts owed to
States and Indian Tribes for conducting the audit); B-207433, Sept.
16, 1983 (cost underrun); B-183184, May 30, 1975 (agency called for
less work than maximum provided under level-of-effort contract).
[End of section]
Chapter 8: Continuing Resolutions:
A. Introduction:
1. Definition and General Description:
Page 8-3 – Replace the first paragraph and insert the reference to new
footnote number 3a as follows:
In 29 of the fiscal years between fiscal years 1977 and 2010, Congress
and the President did not complete action on a majority of the 13
regular appropriations by the start of the fiscal year and thus
necessitated continuing resolutions.3a For the period from fiscal year
1998 through 2010, a total of 79 continuing resolutions were enacted
into law. The average number of such measures enacted per year was
about 6, the actual number ranged from 2 measures (for fiscal years
2009 and 2010) to 21 (for fiscal year 2001).4 GAO has discussed the
problems inherent in this situation in several reports. See, e.g.,
GAO, Continuing Resolutions: Uncertainty Limited Management Options
and Increased Workload in Selected Agencies, GAO-09-879 (Sept.
24, 2009); Updated Information Regarding Funding Gaps and Continuing
Resolutions, GAO/PAD-83-13 (Washington, D.C.: Dec. 17, 1982); Funding
Gaps Jeopardize Federal Government Operations, PAD-81-31 (Washington,
D.C.: Mar. 3, 1981).
Page 8-3 – Insert the following as new footnote number 3a:
[3a] The number of regular appropriations has varied from Congress to
Congress. For example, for the 111th Congress, there were 12. From
1971 to 2004, there were 13. See Library of Congress, Congressional
Research Service, Appropriations Subcommittee Structure: History of
Changes from 1920–2007, No. RL31572 (Jan.
31, 2007).
Page 8-3 – Replace footnote number 4 with the following:
[4] Library of Congress, Congressional Research Service (CRS), The
Congressional Appropriations Process: An Introduction, No. 97-684 (Dec.
2, 2008), at 12–14; CRS, Duration of Continuing Resolutions in Recent
Years, No. RL32614 (Aug. 25, 2010), at 6. See also CRS, Continuing
Appropriations Acts: Brief Overview of Recent Practices, No.
RL30343 (Jan. 10, 2005).
B. Rate for Operations:
1. Current Rate: Page 8-11 – Insert after the first partial paragraph:
GAO considered the distinction between transferred and reprogrammed
funds when calculating the current rate for operations under a
continuing resolution at the request of the United States Capitol
Police (USCP). Specifically, the USCP asked whether $10 million of
unobligated no-year and multiyear balances that it had made available
through reprogrammings and transfers to its fiscal year 2006 “General
Expenses” appropriation should be included in calculating the current
rate under the continuing resolution for its 2007 General Expenses
appropriation. USCP had made that amount available for fiscal year
2006 operational needs via a combination of reprogrammings within its
General Expenses appropriation and a transfer from its Salaries
appropriation to its General Expenses appropriation. GAO stated that
in determining the current rate the amount reprogrammed must be
distinguished from the amount transferred because reprogrammings and
transfers are fundamentally different transactions. A reprogramming is
the movement of funds already in an appropriation from one use to
another. Unless otherwise restricted by statute, agencies may
reprogram funds as they wish to adapt to changing circumstances.
Because Congress had already made available the reprogrammed portion
of the $10 billion, USCP should consider that amount as part of its
current rate under the continuing resolution. In contrast, a transfer
is the movement of funds between appropriations, which an agency may
do only when Congress grants it the statutory authority to do so. USCP
had discretionary authority to transfer funds and used that authority
in fiscal year 2006 to transfer the funds from its Salaries
appropriation to its General Expenses appropriation. GAO concluded
that transfers made at an agency’s discretion pursuant to its general
transfer authority, and not directed by law, should not be included in
the calculation. Therefore, the portion of the $10 million comprised
of the transferred funds could not be included in the calculation of
the current rate under the continuing resolution. B-308773, Jan. 11,
2007.
3. Spending Pattern under Continuing Resolution:
Page 8-15 – Replace the first paragraph with the following:
An agency may determine the pattern of its obligations under a
continuing resolution so long as it operates under a plan which will
keep it within the rate for operations limit set by the resolution. It
is important to consider all the relevant provisions of the continuing
resolution and the operation of the particular program in determining
how to obligate funds during continuing resolutions. See, e.g., B-
318835, May 14, 2010; B-300167, Nov. 15, 2002. If an agency usually
obligates most of its annual budget in the first month or first
quarter of the fiscal year, it may continue that pattern under the
resolution as long as it complies with other provisions in the
continuing resolution. If an agency usually obligates funds uniformly
over the entire year, it will be limited to that pattern under the
resolution, unless it presents convincing reasons why its pattern must
be changed in the current fiscal year.
Page 8-18 – Insert the following after the second full paragraph:
Another question arose with regard to the U.S. Election Assistance
Commission’s (EAC) annual payments to the states for requirements
payments. When EAC was operating under continuing resolutions at the
beginning of fiscal years 2009 and 2005, it delayed obligations until
it received its regular appropriation. GAO did not object to EAC’s
actions since the amounts made available in the continuing resolutions
were subject to multiple conditions imposed by the continuing
resolution—here, most notably, an entitlements provision, a high
initial rate of operations provision, and a limited funding action
provision. GAO found that delaying obligations on a program that
generally continues under a system of annual mandatory payments made
late in the fiscal year is consistent with the relevant continuing
resolution provisions. B-318835, May 14, 2010.
C. Projects or Activities:
Page 8-27 – Replace the cite after the quoted language carried over
from page 8-26 with the following:
Id. See also B-316533, July 31, 2008 (a prohibition against using the
authority provided under section 872 of the Homeland Security Act to
reorganize the Department of Homeland Security was applicable to
amounts appropriated by a fiscal year 2008 continuing resolution
because the prohibition, enacted in 2007, was carried forward under
the terms of the projects or activities limitation in the 2008
continuing resolution).
E. Duration:
1. Duration of Continuing Resolution:
Page 8-36 – Replace the first full paragraph, including new footnote
number 33a with the following:
Thus, some fiscal years have seen a series of continuing resolutions,
informally designated “first,” “second,” etc., up to “final.” This
happens as Congress extends the fixed cutoff date for short time
periods until either all the regular appropriation acts are enacted or
Congress determines that some or all of the remaining bills will not
be enacted individually, in which event relevant portions of the
resolution will continue in effect for the remainder of the fiscal
year. During the period covering fiscal years 1998 through 2010,
Congress enacted 79 continuing resolutions.33a
Page 8-36 – Insert the following as new footnote number 33a:
[33a] Library of Congress, Congressional Research Service, Duration of
Continuing Resolutions in Recent Years, No. RL32614 (Aug. 25, 2010),
at 7.
[End of section]
Chapter 9: Liability and Relief of Accountable Officers:
B. General Principles:
2. Who Is an Accountable Officer?
Page 9-12 – Replace the last paragraph with the following:
In B-280764, GAO did not question the merits of extending
accountability and potential pecuniary liability to more Department of
Defense (DOD) employees, only the means of accomplishing that
objective. In 2002, Congress added new section 2773a to title 10,
United States Code, which supplied the department with the requisite
statutory authority to designate additional accountable officials.12
See B-305919, Mar. 27, 2006 (DOD may employ foreign local nationals as
departmental accountable officials under section 2773a).
3. Funds to Which Accountability Attaches:
Page 9-27 – Replace the second full paragraph with the following:
A common example is the Department of Veterans Affairs (VA) “Personal
Funds of Patients” (PFOP) account. Patients, upon admission to a VA
hospital, may deposit personal funds in this account for safekeeping
and use as needed. Upon release, the balance is returned to the
patient. Patient funds in the PFOP account have been consistently
treated as accountable funds. B-309267, Jan. 15, 2008; 68 Comp. Gen.
600 (1989); 68 Comp. Gen. 371 (1989); B-226911, Oct. 19, 1987; B-
221447, Apr. 2, 1986; B-215477, Nov. 5, 1984; B-208888, Sept. 28, 1984.
C. Physical Loss or Deficiency:
2.Who Can Grant Relief?Page 9-40 – Replace footnote number 27 with the
following:
[27] As noted earlier in section B.2 of this chapter, the Department
of Defense (DOD) has been given the authority to hold other “
departmental accountable officers,” besides certifying and disbursing
officers, liable financially for illegal or erroneous payments
resulting from their negligence. 10 U.S.C. § 2773a. Cf. B-305919, Mar.
27, 2006 (foreign local nationals may serve as DOD accountable
officials under 10 U.S.C. § 2773a, even though they may not be subject
to pecuniary liability under United States law, because of U.S.
agreements with foreign governments). This would include employees
whose duty it was to provide information, data, or services that are
directly relied upon by a certifying official in the certification of
vouchers for payment.
Page 9-41 – Replace the first full paragraph with the following:
The $3,000 limitation applies to “single incidents or the total of
similar incidents which occur about the same time and involve the same
accountable officer.” 7 GAO-PPM § 8.9.C. Thus, two losses arising from
the same theft, one under the limit and one over, should be combined
for purposes of relief. B-189795, Sept. 23, 1977. In B-193380, Sept.
25, 1979, an imprest fund cashier discovered a $300 shortage while
reconciling her cash and subvouchers. A few days later, her
supervisor, upon returning from vacation, found an additional $500
missing. Since the losses occurred under very similar circumstances,
GAO agreed with the agency that they should be treated together for
purposes of seeking relief. Another case, B-187139, Oct. 25, 1978,
involved losses of $1,500, $60, and $50. Since there was no indication
that the losses were related, the agency was advised to separately
resolve the $60 and $50 losses administratively. (The ceiling was $500
at the time of B-193380 and B-187139.) Likewise, in B-260862, June 6,
1995, GAO granted relief to an imprest fund cashier from liability for
the loss of $3,939 missing from a safe, apparently due to theft, but
did not grant relief for an $820 shortage allegedly due to a
bookkeeping error discovered the day prior to the theft. The $820
shortage was referred back to the agency for resolution since it was
under the $3,000 limit. See also B-309267, Jan. 15, 2008 (GAO denied
relief to a cashier for a total loss of $3,280 that occurred in 2001,
and referred a second loss of $123 that occurred in 2003 back to the
agency for resolution).
Page 9-43 – Replace the first paragraph with the following:
As noted above and in sections B.2 and C.1.b of this chapter, the
statutory scheme for military accountable officers was changed by
section 913 of Public Law No. 104-106, div. A, title IX, subtitle B,
110 Stat. 186, 410–12 (Feb. 10, 1996). Section 913 amended a number of
provisions in titles 10, 31, and 37 of the United States Code to
authorize the designation and appointment of certifying and disbursing
officials within the Department of Defense (DOD) (including military
departments, defense agencies, and field activities) to clearly
delineate a separation of duties and accountabilities between
personnel who authorize payments (certifying officers) and personnel
who make payments (disbursing officers). In doing so, section 913 also
amended 31 U.S.C. § 3527(b) to apply to all accountable officials of
the armed forces, not just disbursing officers,31 and included a new
section 3527(b)(1)(B) to provide relief for erroneous payments made by
military accountable officials. As in the case of a physical loss or
deficiency, the finding of the Secretary involved regarding whether
the circumstances warrant relief is conclusive on the Comptroller
General. In B-307693, Apr. 12, 2007, GAO addressed whether the
limitation in 31 U.S.C. § 3527 applies to requests from certifying
officers of DOD components other than the armed services for relief of
erroneous payments under the revised section 3527(b). GAO determined
that, because the term “armed forces” as used in section 3527(b)
applies only to the Army, Navy, Air Force, or Marine Corps, GAO may
entertain relief requests from certifying officers of other DOD
components in the same manner as it does requests from certifying
officers in other agencies. Thus, GAO considered the request of a
certifying officer of the Defense Logistics Agency, an agency of DOD
but not one of the armed forces, in B-307693.
3. Standards for Granting Relief:
Page 9-46 – Replace the last partial paragraph with the following:
GAO follows the same rule, stating it in literally dozens of relief
cases. E.g., B-309267, Jan. 15, 2008; B-288014, May 17, 2002; B-
271896, Mar. 4, 1997; 72 Comp. Gen. 49, 53 (1992); 67 Comp. Gen. 6
(1987); 65 Comp. Gen. 876 (1986); 54 Comp. Gen. 112 (1974); 48 Comp.
Gen. 566 (1969).[Footnote 33]
Page 9-55 – Replace the last partial paragraph inserting new footnote
number 35a as follows:
The rationale is fairly simple. Money does not just get up and walk
away. If it is missing, there is an excellent chance that someone took
it. If the accountable officer exercised the requisite degree of care
and properly safeguarded the funds, it is unlikely that anyone else
could have taken the money without leaving some evidence of forced
entry. Therefore, where there is no evidence to explain a loss, the
leading probabilities are that the accountable officer either took the
money or was negligent in some way that facilitated theft by someone
else.35a Be that as it may, denial of relief in an unexplained loss
case is not intended to imply dishonesty by the particular accountable
officer; it means merely that there was insufficient evidence to rebut
the applicable legal presumption. See B-122688, Sept. 25, 1956. See
also B-258357, Jan. 3, 1996 (loss of receipts creates “unexplained loss”
from imprest fund for which cashier is liable).
Page 9-55 – Insert new footnote number 35a as follows:
[35a] For an example of an unexplained loss case where the cashier was
found to be negligent in the handling of the funds involved, see B-
309267, Jan. 15, 2008.
Page 9-73 – Replace the first full paragraph with the following:
The result in these cases should not be taken too far. Poor agency
security does not guarantee relief; it is merely another factor to
consider in the proximate cause equation. Another relevant factor is
the nature and extent of the accountable officer’s efforts to improve
the situation. See, e.g., B-309267, Jan. 15, 2008 (while GAO has not
required accountable officers to report concerns about the security of
funds to agency management officials, GAO has treated such actions as
evidence of laxity on the part of agency management that could
mitigate against the presumption of negligence; here, relief was
denied since there was evidence that the cashier was negligent in
handling the funds).
D. Illegal or Improper Payment:
2.Certifying Officers:
Page 9-91 – Replace the last paragraph with the following:
Whatever else the certifying officer’s verification burden may or may
not involve, it certainly involves questioning items on the face of
vouchers or supporting documents, which simply do not look right. A
critical tool that certifying officers have to carry out their
responsibility is the power to question, and refuse certification of,
payments that may be improper. See, e.g., B-303177, Oct. 20, 2004. For
example, GAO considered the propriety of imposing liability on a
certifying officer who certified payment of a purchase card billing
statement that included improper purchase card transactions. B-307693,
Apr. 12, 2007. GAO found that, to execute his statutory responsibility
properly and to avoid possible pecuniary liability, the certifying
officer should have scrutinized the billing statement and disputed the
questionable transactions made by the cardholder before certifying the
billing statement for payment to the bank servicing the purchase card.
Since he knew or should have known that he was certifying an improper
payment when he certified the purchase card payment, the certifying
officer was denied relief. Id.
Also, a certifying officer who certifies a voucher for payment in the
full amount claimed, disregarding the fact that the accompanying
records indicate an outstanding indebtedness to the government against
which the sum claimed is available for offset, is accountable for any
resulting overpayment. 28 Comp. Gen. 425 (1949). See also B-303920,
Mar. 21, 2006 (facts and circumstances should have alerted certifying
officer to the fact that he was improperly certifying payments to
purchase bottled water for employees, an unauthorized expenditure).
Similarly, certifying a voucher in the full amount within a prompt
payment discount period without taking the discount will result in
liability for the amount of the lost discount. However, a certifying
officer is not liable for failing, even if negligently, to certify a
voucher within the time discount period. 45 Comp. Gen. 447 (1966).
Page 9-92 – Insert the following before the first full paragraph:
A certifying officer’s statutory liability does not extend to the
exercise of discretion and judgment, which resides with program
officials. In B-322898, May 25, 2012, GAO considered a request from a
certifying officer concerning a payment to an agency grantee.
A responsible program official had properly awarded the grant, but
later identified issues with the grantee’s financial condition.
Accordingly, the program official authorized only a partial payment of
the grant award and imposed additional restrictions, consistent with
agency regulations. The certifying officer asked GAO whether she could
certify this payment given the agency’s knowledge of the grantee’s
financial conditions. While GAO commended the certifying officer’s
fiscal stewardship in expressing concern about the prudence of making
the payment, GAO explained that because there was no question as to
the legality of the award or payment, the certifying officer could
certify payment without incurring liability. Cf. B-323449, Aug. 14,
2012 (certifying officer properly refused to certify a payment where
questions existed about the legality of the payment).
Page 9-97 – Replace the third paragraph with the following:
In B-237419, Dec. 5, 1989, relief was granted to a Forest Service
certifying officer who certified the refund of a timber purchaser’s
cash bond deposit without knowing that the refund had already been
made. The certifying officer had followed proper procedures by
checking to see if the money had been refunded, but did not discover
the prior payment because it had not been properly recorded. Also, the
agency was pursuing collection efforts against the payee. Similarly,
relief was granted to a certifying officer at the American Embassy in
Managua who certified an erroneous duplicate separation retirement
payment to a local employee because the officer did not know, and
after reasonable diligence and inquiry did not discover, the fact that
the duplicate payment was being issued from another part of the
agency. The officer certified the payment pursuant to the direction of
an administrative official and in the belief that funds had been made
available in the charged account. B-317390, Feb. 20, 2009.
4. Check Losses:
Page 9-125 – Insert the following as full text after the “Duplicate
Payment” bullet:
In another duplicate payment scenario, a certifying officer at the
American Embassy in Managua was relieved of liability for an
overpayment that occurred as the result of a duplicate payment of
separation retirement benefits made to an Embassy employee. The
duplicate payment was erroneously paid to the employee as a result of
confusion at the Embassy concerning the proper procedure for
processing separation retirement payments. The certifying officer at
first refused to sign the voucher for the payment because she thought
that under revised procedures the Embassy no longer processed such
payments. However, she ultimately certified the payment pursuant to
the direction of an administrative official and in the belief that
funds had been made available in the charged Embassy account. The
certifying officer did not know, and after reasonable diligence and
inquiry did not discover, the fact that a duplicate payment was being
issued from another part of the agency. Finding that she persistently
questioned payment as far as she could with the information she had,
and that she should not be held responsible for information that was
withheld from her, GAO relieved the certifying officer of liability
for the duplicate payment. B-317390, Feb. 20, 2009.
E. Other Relief Statutes:
1. Statutes Requiring Affirmative Action:
Page 9-129 – Replace the last paragraph with the following:
Since 31 U.S.C. § 3728, the primary certifying officer relief statute,
does not apply to the legislative or judicial branches, Congress has
enacted specific statutes for several legislative branch agencies and
for the judicial branch authorizing or requiring the designation of
certifying officers, establishing their accountability, and, in some
cases, authorizing the Comptroller General to grant relief. Patterned
after 31 U.S.C. § 3728, they are: 2 U.S.C. § 142b (Library of
Congress), 2 U.S.C. § 142e (Congressional Budget Office), 2 U.S.C. §
142l (Office of Compliance), 2 U.S.C. § 1904 (Capitol Police), and 44
U.S.C. § 308 (Government Printing Office). The Secretary of the Senate
and the Speaker of the House of Representatives have the authority to
waive the collection of erroneous payments of salary or allowances for
employees of the Senate and the House, respectively. 2 U.S.C. §§ 130c,
130d. The relevant provision for the judicial branch is 28 U.S.C. §
613. See B-303920, Mar. 21, 2006.
[End of section]
Chapter 10: Federal Assistance: Grants and Cooperative Agreements:
A. Introduction:
Page 10-4 – Replace footnote number 5 with the following:
[5] The Domestic Working Group, chaired by the Comptroller General,
consists of 19 federal, state, and local audit organizations. Its
purpose is to identify current and emerging challenges of mutual
interest and to explore opportunities for greater collaboration within
the intergovernmental audit community. The Guide describes a number of
ideas and best practices to enhance grant management and
administration. It covers several topics that are discussed in this
chapter. An electronic copy of the Guide can be found at [hyperlink,
http://www.ignet.gov/randp/grantguide.pdf] (last visited Dec. 30,
2010).
Page 10-5 – Replace footnote number 6 with the following:
[6] The Catalog of Federal Domestic Assistance is published by the
General Services Administration and the Office of Management and
Budget (OMB) pursuant to 31 U.S.C. § 6104 and OMB Circular No. A-89,
Federal Domestic Assistance Program Information (Aug. 17, 1984). The
Catalog is a governmentwide list of financial and nonfinancial federal
assistance programs, projects, services, and activities administered
by federal agencies that provide assistance or benefits to the
American public. 31 C.F.R. § 205.2. The most recently updated print
edition and the frequently updated online version can both be accessed
through the Catalog’s Web site at [hyperlink, http://www.cfda.gov]
(last visited Dec. 30, 2010). In addition, OMB, on December 13, 2007,
rolled out a new publicly accessible Web site that provides
information on all major federal grants, loans, and contracts. See
[hyperlink, http://www.USASpending.gov] (last visited Dec. 30, 2010).
This Web site is in response to 2006 legislation to improve the
accessibility of federal spending data, Federal Funding Accountability
and Transparency Act of 2006, Pub. L. No. 109-282, 120 Stat. 1186
(Sept. 26, 2006), 31 U.S.C. § 6101 note.
B. Grants versus Procurement Contracts:
1. The Federal Grant and Cooperative Agreement Act:
Page 10-16 – Insert the following after the first full paragraph:
An example of a statutory scheme for oversight of a grant program can
be found in the Help America Vote Act of 2002 (HAVA), which authorizes
various federal agencies to make grants or provide payments of federal
funds to the states and various other entities for purposes related to
election reform. Pub. L. No. 107-252, 116 Stat. 1666 (Oct. 29, 2002).
Section 902 of HAVA authorizes each agency making a grant or payment
to audit any recipient of the funds, and also provides that if the
Comptroller General makes a determination as a result of an audit that
a fund recipient did not comply with program requirements or received
an excess payment, the recipient must return a certain portion of the
payment. In B-306475, Jan. 30, 2006, GAO concluded that the provision
regarding GAO audits does not supersede the independent statutory
authority of agencies to audit and take corrective action on the use
of federal funds, so GAO need not make its section 902 determination
before a paying agency may audit and take corrective action on
questioned costs. If the Comptroller General were to make a
determination under HAVA as a result of any audit he conducts, he will
make an appropriate recommendation for the agency to determine
liability and take corrective action. B-306475, at 5.
C. Some Basic Concepts:
2. Availability of Appropriations:
Page 10-36 – Replace the last paragraph with the following:
GAO considered this issue in a recent decision, B-303927, June 7,
2005. Congress appropriated funds to the Department of Labor to assist
in response and recovery following the September 11, 2001, terrorist
attacks on the United States. The appropriation earmarked $125 million
for the purpose of payment to the New York Workers’ Compensation Board
for “processing of claims related to the terrorist attacks.” The Labor
Department distributed the funds to the Board through a grant. The
Board did not use the funds to process claims, but gave them to other
New York state entities to reimburse those entities for claims they
had paid on behalf of victims. GAO held that use of the funds for this
purpose was inconsistent with the language of the appropriation. See
also B-318831, Apr. 28, 2010 (the Election Assistance Commission
violated the purpose statute when it obligated its appropriations
based on language in a conference report instead of the plain, clear
language of the appropriations act itself). By contrast, GAO held in
another “purpose” case, B-248111, Sept. 9, 1992, that grant funds were
available for the activities in question based on the language of the
authorizing statute and its legislative history.
Page 10-39 – Replace the second full paragraph with the following:
Funds must be obligated by the grantor agency within their period of
availability.31 The period of availability of appropriated funds is
the period of time provided by law in which the administering agency
has to obligate the funds. B-319734, July 26, 2010; B-271607, June 3,
1996. The statutory requirement for recording obligations extends to
all actions necessary to constitute a valid obligation, and includes,
of course, grant obligations (31 U.S.C. § 1501(a)(5)).32 Proper
recording of grant obligations facilitates compliance with the “time
of obligation” requirement by ensuring that agencies have adequate
budget authority to cover their obligations. See B-316372, Oct. 21,
2008; B-300480, Apr. 9, 2003, aff’d, B-300480.2, June 6, 2003.
Page 10-43 – Replace the first full paragraph with the following:
Appropriations for grant programs are generally subject to the same
time availability rules as other appropriations. Adherence to the
existing framework for grantmaking, as laid out in the statute and
implementing regulations, provides structure and consistency, which in
turn promotes the goals of proper administration and accounting, as
well as fairness to all grant applicants. For example, in one case,
despite apparent statutory and regulatory limitations on grants to
certain colleges and graduate institutions, the Education Department
had granted four-year “extensions” to the original five-year grants
awarded to those institutions. GAO concluded that Education should
strictly adhere to the statutory and regulatory duration restrictions
for grant periods and terminate grants improperly extended. If, at
that time, Education determined that additional assistance was
warranted, the department could award a new grant to that institution
or, in the alternative, seek legislative changes that would allow for
extensions to five-year grants. B-303845, Jan. 3, 2006.
Also, when Congress expressly provides that a grant appropriation “
shall remain available until expended” (no-year appropriation), the
funds remain available until they are obligated and expended by the
grantor agency, subject to the account closing statute, 31 U.S.C. §
1555. See, e.g., B-271607, June 3, 1996. It should be emphasized that
the time availability of grant appropriations governs the grantor agency
’s obligation and expenditure of the funds; it does not limit the time
in which the grantee must use the funds once it has received them. B-
289801, Dec. 30, 2002. Of course, the grant statute or the grantor
agency may impose time limits on a grantee’s use of funds. See City of
New York v. Shalala, 34 F.3d 1161 (2nd Cir. 1994); Mayor and City
Council of Baltimore v. Browner, 866 F. Supp. 249 (D. Md. 1994).
3. Agency Regulations:
Page 10-52 – Replace the first full paragraph with the following:
Apart from providing for regulatory consolidation and streamlining,
the Federal Financial Assistance Management Improvement Act contained
a number of other provisions designed to improve federal assistance
processes and performance. It also imposed additional responsibilities
on the agencies and OMB. For example, in response to the act, OMB
developed Grants.gov on the Internet as the central grant
identification and application portal for federal grant programs to
make it easier for applicants to find grant opportunities and grantors
to process applications faster. See GAO, Grants.gov Has Systemic
Weaknesses That Require Attention, GAO-09-589 (Washington, D.C.: July
15, 2009). Section 7 of Public Law 106-107 mandated a GAO evaluation
of the effectiveness of the act. GAO reported the results of its
evaluation in Grants Management: Additional Actions Needed to
Streamline and Simplify Processes, GAO-05-335 (Washington, D.C.: Apr.
18, 2005). See also GAO, Federal Assistance: Grant System Continues to
Be Highly Fragmented, GAO-03-718T (Washington, D.C.: Apr. 29, 2003).
F. Obligation of Appropriations for Grants:
1. Requirement for Obligation:
Page 10-107 – Replace the first paragraph after the quoted language
with the following:
Briefly stated, the “obligational event” for a grant generally occurs
at the time of grant award. Therefore, this is when the grantor agency
must record an obligation under 31 U.S.C. § 1501(a)(5), not when the
grantee draws down the funds or when the grantee incurs its own
obligations. See B-316372, Oct. 21, 2008; B-300480, Apr. 9, 2003, aff’
d, B-300480.2, June 6, 2003.
2. Changes in Grants:
Page 10-107 – Replace the first full paragraph above the bulleted list
with the following:
Changes in grants may come about for a variety of reasons: the
original grantee may be unable to perform, the agency discovers a
defect in the grantee selection process, the grant amount may be
increased, there may be a redefinition of objectives, etc. If the
change occurs in the same fiscal year (or longer period if a multiple
year appropriation is involved) in which the original grant was made,
there is no obligation problem as long as the amount of the
appropriation available for obligation is not exceeded. If, however,
the change occurs in a later fiscal year, the question becomes whether
the amended grant remains chargeable to the appropriation initially
obligated or whether it constitutes a new obligation chargeable to
appropriations current at the time the change is made. As pointed out
in 58 Comp. Gen. 676, 680 (1979), the cases have identified three
closely related areas of concern that must be satisfied before a
change may be viewed as a so-called “replacement grant,” that is, not
as creating a new obligation that must be charged to the current
appropriation:
Page 10-109 – Insert the following after the second full paragraph:
An agency may award a replacement grant where the original award is
vacated because of a defect in the competitive selection process. B-
322628, Aug. 3, 2012. For instance, the Department of Labor’s
Employment Training Administration (ETA) obligated amounts for two
grants against an appropriation available from April 1, 2009, through
June 30, 2010. ETA later vacated the grants after a grant officer
discovered improper contact between the grant management specialist
and the selection panelists and questioned how thoroughly the
selection panelists had been brief and supervised. GAO concluded that
the original appropriation remained available to fund replacement
grants in fiscal year 2011, despite the fact that the original
appropriation had expired, because (1) the need for the object of the
grant continued to exist; (2) the nature and purpose
of the replacement grant are the same as the original grant; and (3)
the replacement grant was executed without undue delay. Id. GAO
explained that replacement grants, under these circumstances,
represent a continuation of the original obligation rather than a new
obligation.
G. Grant Costs:
1. Allowable versus Unallowable Costs:
Page 10-126 – Insert the following after the first full paragraph:
In another case, GAO considered a Federal Emergency Management Agency
(FEMA) reimbursement to a subgrantee receiving Stafford Act (42 U.S.C.
§§ 5121–5206) funds of $3.8 million for the cost of rocks used for
emergency repairs and improvements to facilities. The rocks had
originally cost the subgrantee less than $20,000. Given the lack of
documentation in the record regarding other pricing methods that may
have been more appropriate to the circumstances and that would ensure
the subgrantee did not obtain such a sizable windfall, GAO recommended
that FEMA reassess its reimbursement and determine if recovery action
is warranted. B-317098, Mar. 13, 2009.
Page 10-127 – Replace the last paragraph with the following:
In one case, GAO did concur in a proposal by a grantor agency to adopt
a method of calculation that disallowed less than the entire amount of
a grant where the grantee had maintained inadequate records. B-186166,
Aug. 26, 1976. In this case, a university had received a series of
federal research grants spanning a number of years. The university had
no records to document its disposition of grant funds for periods
prior to fiscal year 1974. Audits of available university records for
grant expenditures in fiscal years 1974 and 1975 disclosed certain
unallowable costs. The GAO decision held that the grantor agency had
discretion to disallow the same proportion of funds for the years for
which no documentation was available as were disallowed for the
periods for which records existed. See also B-317098, Mar. 13, 2009
(Federal Emergency Management Agency should reassess its reimbursement
to a subgrantee where there was no documentation supporting the
pricing method used and that method resulted in a significant windfall
to the subgrantee).
H. Recovery of Grantee Indebtedness:
1. Government’s Duty to Recover:
Page 10-133 – Insert the following after the third full paragraph:
Also, where a reimbursement by the Federal Emergency Management Agency
(FEMA) to a subgrantee was calculated using a questionable pricing
method that afforded the subgrantee a significant windfall, GAO
recommended that FEMA reassess its reimbursement to determine if the
reimbursement in question should be reduced or disallowed, and the
amount recovered. B-317098, Mar. 13, 2009.
[End of section]
Volume 3:
Chapter 12 – Acquisition of Goods and Services:
Chapter 13 – Real Property:
Chapter 14 – Claims against and by the Government:
Chapter 15 – Miscellaneous Topics:
[End of section]
Chapter 12: Acquisition of Goods and Services:
A. Acquisition and Disposal of Property for Government Use:
1. General Services Administration Schedule Programs:
Page 12-5 – Replace the last paragraph with the following, including
reference to new footnote number 2a:
GSA administers the Federal Supply Schedule (FSS) program, also known
as the GSA Schedules Program or the Multiple Award Schedule Program
(MAS), which is a simplified process for federal agencies to obtain
commercial supplies and services at prices associated with volume
buying.[Footnote 2a] See generally Federal Acquisition Regulation
(FAR), 48 C.F.R. pt. 8.4. Indefinite delivery contracts are awarded to
provide supplies and services at stated prices for given periods of
time. FAR § 8.402(a). Ordering agencies are authorized to place
orders, or to establish blanket purchase agreements, against a vendor’
s FSS contract. Id. § 8.401. Orders and blanket purchasing agreements
are considered to be issued using full and open competition;
therefore, when placing orders under FSS contracts or when
establishing a blanket purchasing agreement, ordering agencies do not
need to seek competition outside the FSS. Id. § 8.404(a).
Page 12-5 – Insert the following for new footnote number 2a:
2a In 2010, GAO reported that, while agencies spent at least $60
billion in fiscal year 2008 through these contracts and similar single-
agency enterprisewide contracts, there are concerns about duplication,
oversight, and a lack of information on these contracts, and pricing
and management of the MAS program, which calls into question whether
the use of such contracts helps government buyers leverage their
buying power. GAO, Contracting Strategies: Data and Oversight Problems
Hamper Opportunities to Leverage Value of Interagency and
Enterprisewide Contracts, GAO-10-367 (Washington, D.C.: Apr. 29,
2010). GAO made a number of recommendations to strengthen policy,
coordinate agencies’ awards, and improve MAS program data, pricing,
and management. Id. at 47–49.
Page 12-6 – Replace footnote number 4 with the following:
[4] But see B-318046, July 7, 2009 (in the absence of reliable
historical usage data, an agency may use $500 as the guaranteed
minimum for an indefinite-delivery, indefinite-quantity (IDIQ)
contract, which amount must be obligated at the time of award); B-
308969, May 31, 2007 (the government incurred a legal liability in the
amount of the guaranteed minimum in an IDIQ contract at the time in
which the contract was awarded and the agencies involved should have
obligated that amount at that time); B-302358, Dec. 27, 2004 (upon
award of an IDIQ contract Customs should have obligated the contract
guaranteed minimum of $25 million in accordance with the recording
statute to ensure the integrity of Customs’s obligational accounts
records).
B. Interagency Transactions:
1. The Economy Act:
Page 12-26 – Replace the first full paragraph with the following:
The introductory portion of 31 U.S.C. § 1535(a) tells you who can use
the authority and what they can use it for. Both points will be
explored later in more detail. The numbered subsections establish four
basic conditions on use of the authority. The Economy Act and Economy
Act interagency agreements are not the appropriate vehicles to use to
make a transfer of funds between agencies when there is no exchange of
funds for goods or services. B-319189, Nov. 12, 2010 (Federal Transit
Administration was statutorily directed to transfer funds to the
Denali Commission and should effect the transfer using the Department
of Treasury’s nonexpenditure transfer procedures, not an Economy Act
agreement).
Page 12-32 – Replace the last paragraph with the following:
There are also a few instances in which entities that clearly are
agencies or instrumentalities of the United States, or which are
treated as such for other purposes, are not covered. For example, the
Postal Service, although clearly an instrumentality of the United
States, is subject only to those statutes specifically designated in
the Postal Reorganization Act; however, the Economy Act is not one of
the statutes designated. B-317878, Mar. 3, 2009; 58 Comp. Gen. 451,
459 (1979). It also does not apply to nonappropriated fund
instrumentalities. 64 Comp. Gen. 110 (1984).[Footnote 23]
Page 12-40 – Replace the first full paragraph with the following:
In addition to direct costs, it has long been recognized that actual
cost for Economy Act purposes includes as well certain indirect costs
(overhead) proportionately allocable to the transaction. E.g., B-
301714, Jan. 30, 2004; 22 Comp. Gen. 74 (1942). Indirect costs are
“items which commonly are recognized as elements of cost
notwithstanding such items may not have resulted in direct
expenditures.” 56 Comp. Gen. 275 (1977); 22 Comp. Gen. 74. Indirect
costs which (1) are funded out of currently available appropriations,
and (2) bear a significant relationship to the service or work
performed or the materials furnished, are recoverable in an Economy
Act transaction the same as direct costs. 56 Comp. Gen. 275 (1977), as
modified by 57 Comp. Gen. 674 (1978), as modified in turn by B-211953,
Dec. 7, 1984. Examples of indirect costs include administrative
overhead applicable to supervision (56 Comp. Gen. 275); billable time
not directly chargeable to any particular customer (B-257823, Jan. 22,
1998); and rent paid to the General Services Administration
attributable to space used in the course of performing Economy Act
work (B-211953, Dec. 7, 1984). In calculating indirect costs, entities
should “(1) use and consistently follow costing methodologies or cost
finding techniques most appropriate to the operating environment to
accumulate and assign costs; (2) document managerial cost accounting
activities, processes, and procedures; and (3) periodically evaluate
indirect costing methods.” GAO, Centers for Disease Control and
Prevention: An Appropriate Methodology Is Needed for Determining
Administrative Costs Attributable to the Agency for Toxic Substances
and Disease Registry, GAO-10-610R (Washington, D.C.: May 20, 2010), at
2.
C. Revolving Funds:
3. Types:
Page 12-101 – Replace the second full paragraph with the following:
A working capital fund may also provide goods or services to other
agencies on a reimbursable basis. See, e.g., 43 U.S.C. § 50a, the
United States Geological Survey Working Capital Fund (“the fund shall
be credited with appropriations and other funds of the Survey, and
other agencies of the Department of the Interior, other Federal
agencies, and other sources, for providing materials, supplies,
equipment, work and services”). See also GAO, Intragovernmental
Revolving Funds: NIST’s Interagency Agreements and Workload Require
Management Attention, GAO-11-41 (Washington, D.C.: Oct. 20, 2010),
concerning the National Institute of Standards and Technology’s
working capital fund. These working capital funds may operate
similarly to the franchise and other entrepreneurial revolving funds
described below.
4. Expenditures/Availability:
Page 12-118 – Insert the following after the first partial paragraph:
Amounts advanced by a customer agency to a working capital fund are
not earned by the working capital fund until the working capital fund
incurs costs or proper obligations in performing for its customer
agency. Advances not earned by the working capital fund before the
appropriation advanced is canceled by operation of law are no longer
available to the working capital fund. B-319349, June 4, 2010.
Generally, fiscal year appropriations are canceled by operation of law
on September 30 of the fifth fiscal year following the fiscal year for
which they were provided. 31 U.S.C. §§ 1551– 1553; 2 U.S.C. § 1907(d).
D. User Charges:
3. The Independent Offices Appropriation Act:
Page 12-152 – Replace the first full paragraph with the following:
Some courts have held that in order to assess fees under the
Independent Offices Appropriation Act (IOAA), an agency must first
issue regulations. See, e.g., Sohio Transportation Co. v. United
States, 766 F.2d 499, 502 (Fed. Cir. 1985); Alyeska Pipeline Service
Co. v. United States, 624 F.2d 1005, 1009 (Ct. Cl. 1980); Alaskan
Arctic Gas Pipeline Co. v. United States, 9 Cl. Ct. 723, 732–33
(1986), aff’d, 831 F.2d 1043 (Fed. Cir. 1987) (issuance of regulations
a “condition precedent”). See also B-316796, Sept. 30, 2008, at 14–15
(since FAA’s implementation of a proposed auction of airport arrival
and departure slots would amount to a new user fee under IOAA, “
implementation of the auction would require a new regulation”). A
simple policy statement to the effect that fees will be charged for
special services has been held too vague to support fee assessment.
Diapulse Corp. of America v. FDA, 500 F.2d 75, 79 (2nd Cir. 1974).
Rather, since rulemaking under the Administrative Procedure Act
generally must provide the opportunity for public comment, 5 U.S.C. §
553, the agency’s notice must include, or make available on request, a
reasonable explanation of the basis for the proposed fee. This, one
court has held, must be one that “the concerned public could
understand.” Engine Manufacturers Association v. EPA, 20 F.3d 1177,
1181 (D.C. Cir. 1994). In that case, the court rejected as inadequate
an agency cost analysis which, according to the court, “contains page
after page of impressive looking but utterly useless tables” and some “
complete gibberish.” Id.
It is probably impossible to predict what would be acceptable to any
given court at any given time, but cases like this demonstrate the
need for the agency to observe at least some minimal level of clarity
and provide its explanation “in intelligible if not plain English.”
Id. at 1183. The Court of Appeals for the District of Columbia Circuit
has also stressed the need for the agency to make a clear public
statement of the basis for its fees so that a reviewing court can
measure the agency’s action against the Supreme Court’s standards.
National Cable Television Association v. FCC, 554 F.2d 1094, 1100,
1104–05 (D.C. Cir. 1976).
4. Other Authorities:
Page 12-170 – Insert the following before the last partial paragraph:
Similarly, since fiscal year 1998 Congress has included an
appropriations act restriction expressly prohibiting the Federal
Aviation Administration (FAA) from imposing any “new aviation user fees”
without specific statutory authority. The 2008 fiscal year prohibition
stated: “[N]one of the funds in this [Appropriations] Act shall be
available for the Federal Aviation Administration to finalize or
implement any regulation that would promulgate new aviation user fees
not specifically authorized by law after the date of the enactment of
this Act.” Pub. L. No. 110-161, 121 Stat. 1844, 2379 (2007). While
this provision does not explicitly reference the IOAA, GAO has
concluded that the provision would preclude FAA’s use of IOAA as
authority to auction airport arrival and departure slots because such
auctions would amount to a “new aviation user fee” not specifically
authorized by law. B-316796, Sept. 30, 2008.
[End of section]
Chapter 13: Real Property:
A. Introduction and Terminology:
Page 13-5 – Replace footnote number 1 with the following:
[1] The federal government owns approximately 636 million acres
nationwide. This includes 3.5 percent of all land in the northeastern
and north central United States, 5.1 percent in the south Atlantic and
south central regions, and 56.6 percent of the western United States.
GAO, High-Risk Series: Federal Real Property, GAO-03-122 (Washington,
D.C.: Jan. 2003), at 5–6. The proportion of federal land ownership is
actually decreasing. A 1996 report put the figure at about 650 million
acres or about 30 percent, down from slightly over 700 million acres
in 1964. GAO, Land Ownership: Information on the Acreage, Management,
and Use of Federal and Other Lands, GAO/RCED-96-40 (Washington, D.C.:
Mar. 13, 1996), at 2–4. One major caveat with respect to these figures
is that Uncle Sam does not really know how much property he owns since
available data are unreliable. See generally GAO, Federal Real
Property: Better Governmentwide Data Needed for Strategic
Decisionmaking, GAO-02-342 (Washington, D.C.: Apr. 16, 2002). In
subsequent reviews, GAO has found that the federal government has made
progress in revamping its governmentwide real property inventory since
GAO’s 2003 high-risk designation in GAO-03-122, but data reliability
is still a problem at the agency level and agencies continue to retain
excess property and face challenges from repair and maintenance
backlogs. GAO, Federal Real Property: An Update on High Risk Issues,
GAO-09-801T (Washington, D.C.: July 15, 2009); Federal Real Property:
An Update on High-Risk Issues, GAO-07-895T (Washington, D.C.: May 24,
2007), at 14. See also GAO, Federal Real Property: Progress Made
Toward Addressing Problems, but Underlying Obstacles Continue to
Hamper Reform, GAO-07-349 (Washington, D.C.: Apr. 13, 2007). The
material that follows in this Introduction has been distilled from
many sources. They include: Marla E. Mansfield, A Primer of Public
Land Law, 68 Wash. L. Rev. 801, 802 n.1 (1993); George C. Coggins and
Charles F. Wilkinson, Federal Public Land and Resources Law (1981);
and Paul W. Gates, Public Land Law Review Commission, History of
Public Land Law Development (1968).
B. Leasing:
1. Some General Principles:
Page 13-127 – Insert the following after the second full paragraph:
There was a similar result in B-316860, Apr. 29, 2009, under different
circumstances. There, GAO found that the National Transportation
Safety Board did possess statutory authority to lease real property
independent of 40 U.S.C. § 585(a)(2). The Board receives, however,
fiscal year appropriations only. Based on 41 U.S.C. § 254c, GAO held
that the Board could enter into multiyear leases for up to five years
if, at the time the lease is signed, the Board obligates from current
fiscal year funds an amount sufficient to cover the cost of the first
fiscal year in which the contract is in effect plus the estimated
costs of termination, or an amount sufficient to cover the agency’s
obligations for the full period of the contract.
2. Statutory Authorities and Limitations:
Page 13-145 – Replace the first paragraph with the following:
As discussed in section C.13.j(1) of Chapter 4, a government employee
does not have a right to a parking space, with or without charge, and
an agency is under no obligation to furnish one. See American
Federation of Government Employees v. Freeman, 498 F. Supp. 651, 654–
55 (D.D.C. 1980) (government employee does not have a “property
interest in free parking”); B-168096, Dec. 6, 1975 (furnishing of
parking is not a right but a privilege). Nevertheless, the government
may choose to provide parking facilities as an aid to operating
efficiency and the hiring and retention of personnel. E.g., 63 Comp.
Gen. 270, 271 (1984); B-168096, Jan. 5, 1973 (nondecision letter). See
also B-322337, Aug. 3, 2012. From the availability of appropriations
perspective, it makes no difference whether the employees work in
government-owned space or in leased space. B-152020, July 28, 1970.
Page 13-155 – Add the following bullet to the list under “Some
examples from the civilian side of the government are:”
* 49 U.S.C. § 1113(b)(1)(B): National Transportation Safety Board may
“enter into ... such contracts, leases, cooperative agreements or
other transactions as may be necessary in the conduct of the functions
and the duties of the Board,” as explained in B-316860, Apr. 29, 2009.
F. Public Buildings and Improvements:
1. Construction:
Page 13-183 – Replace the first two paragraphs with the following:
Not surprisingly,160 the most detailed and comprehensive scheme is
that applicable to the Defense Department and the military
departments. Typically, construction funds are appropriated to each
department in a lump sum to be used “as authorized by law,” which
means in accordance with authorization acts required by 10 U.S.C. §
114(a)(6).161 See, e.g., B-318897, Mar. 18, 2010 (funds in the U.S.
Army Corps of Engineers’ (USACE) Revolving Fund are not available to
pay for the cost of replacing an existing USACE Engineer Research and
Development Center headquarters building without specific
congressional authorization). Most of the funds are authorized by
installation, in line-item format. In addition, each department
receives a lump-sum authorization for “unspecified minor military
construction projects.”
Substantive provisions are found in the Military Construction
Codification Act,162 codified chiefly in 10 U.S.C. §§ 2801–2853.
“Military construction” is defined broadly as “any construction,
development, conversion, or extension of any kind carried out with
respect to a military installation, whether to satisfy temporary or
permanent requirements.” 10 U.S.C. § 2801(a). A “military construction
project” includes all military construction “necessary to produce a
complete and usable facility or a complete and usable improvement to
an existing facility” or authorized portion thereof. 10 U.S.C. §
2801(b). See, e.g., B-318897, Mar. 18, 2010.
[End of section]
Chapter 14: Claims against and by the Government:
C. Claims against the Government:
2. Source of Payment of Claims against the Government:
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The Judgment Fund is not itself a waiver of sovereign immunity. Thus,
the legal basis for a judgment or award must be found elsewhere in the
law. OPM v. Richmond, 496 U.S. 414, 432 (1990) (section 1304 “does not
create an all-purpose fund for judicial disbursement. . . . Rather,
funds may be paid out only on the basis of a judgment based on a
substantive right to compensation based on the express terms of a
specific statute.”). See also County of Suffolk, New York v. Sebelius,
605 F.3d 135, 143 (2nd Cir. 2010).
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Where the United States is not obligated to pay a claim until a final
determination of liability has been made, the appropriation current at
the time that determination is made is properly chargeable with the
obligation. E.g., 65 Comp. Gen. 533, 541 (1986); 63 Comp. Gen. 308
(1984); 38 Comp. Gen. 338, 340 (1958); B-174762, Jan. 24, 1972. This
rule is “grounded on the theory that the court or administrative award ‘
creates a new right’ in the successful claimant, giving rise to new
Government liability.” 63 Comp. Gen. at 310. See also B-272984, Sept.
26, 1996; B-255772, Aug. 22, 1995. As a general proposition, claims
involving property damage or personal injury will fall into this
category. E.g., 38 Comp. Gen. 338; 35 Comp. Gen. 511, 512 (1956).
Thus, administrative awards of $2,500 or less under the Federal Tort
Claims Act are payable from funds currently available at the time the
claim is determined to be proper for payment. 38 Comp. Gen. 338;
35 Comp. Gen. at 512; 27 Comp. Gen. 445 (1948); 27 Comp. Gen. 237
(1947). Similarly, payments under the Military Personnel and Civilian
Employees’ Claims Act of 1964 are chargeable to funds current when a
final determination of liability is made. B-174762, Jan. 24, 1972.
Another case involved the proper obligation of a settlement executed
in fiscal year 2007 of cost overruns incurred in fiscal year 2006 as a
result of an unauthorized contract modification during the performance
of a contract. The agency charged the settlement amount to its fiscal
year 2006 appropriation. GAO disagreed, however, concluding that the
settlement created a new obligation in fiscal year 2007 and should
have been charged against the agency’s fiscal year 2007 appropriation.
B-317413, Apr. 24, 2009.
3. Whom and What to Pay:
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reference to new footnote number 94a:
The second EAJA provision applicable to judicial awards is section
2412(d). It is a “catch-all” provision that generally applies to any
civil action brought by or against the United States except tort cases
or cases subject to another fee-shifting statute. It parallels the
provisions of 5 U.S.C. § 504(a), discussed above. A prevailing party
(other than the United States) who meets specified financial
eligibility criteria may apply to the court for a fee award under this
subsection.94a Fees will be awarded unless the court finds that “the
position of the United States was substantially justified or that
special circumstances make an award unjust.” 28 U.S.C. § 412(d)(1)(A).
The “substantially justified” determination includes the underlying
administrative action, as well as the government’s position in the
lawsuit. 28 U.S.C. § 2412(d)(1)(B). Once the party applies for the fee
application, the burden shifts to the United States to establish that
its position was substantially justified.95 E.g., International Air
Response, Inc. v. United States, 80 Fed. Cl. 460, 463 (2008). Fees are
limited to $125 per hour, but courts may award higher amount based on
cost-of-living increases or other special factors. 28 U.S.C. §
2412(d)(2)(A). An award may be reduced or denied if the prevailing
party has “unduly and unreasonably protracted” the case. 28 U.S.C. §
2412(d)(1)(C).
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[94a] Under section 2412(d), an award of fees and other expenses to a “
prevailing party” is payable to the litigant, not the attorney, and is
therefore subject to a government offset to satisfy a pre-existing
debt that the litigant owes the United States. Astrue v. Ratliff, 560
U.S. ___, 130 S. Ct. 2521 (2010).
[End of section]
Chapter 15: Miscellaneous Topics:
A. Boards, Committees, and Commissions:
2. Title 31 Funding Provisions:
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page with the following:
90 Cong. Rec. 3059 (1944), quoted in 24 Comp. Gen. 241, 243 (1944).
4. The Federal Advisory Committee Act:
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Similarly, the United States Postal Service (USPS) has considered
itself exempt from FACA even though USPS was not expressly exempted in
either FACA or its own authorizing legislation. The Postal
Reorganization Act, 39 U.S.C. § 410, does grant USPS a broad exemption
from many similar procedural laws, and Congress has never specifically
made FACA applicable to USPS despite enacting multiple amendments to
section 410 over the years to explicitly subject USPS to other
procedural acts. The District of Columbia District Court agreed with
USPS and determined that FACA does not apply to the USPS Mailer’s
Technical Advisory Committee. American Postal Workers Union v. United
States Postal Service, 541 F. Supp. 2d 95 (D.D.C. 2008).
B. Government Use of Corporate Entities:
2. The Problem of Definition:
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number 51a as follows:
Given the absence of a definitive legal definition of what constitutes
a government corporation, we need to resort to other sources. As we
have seen, one approach is to try to identify common attributes.51a
One analyst identifies some of these attributes as “a public purpose,
a federal government charter, some form of government supervision, and
a public subsidy.”[Footnote 52] While this is useful in establishing a
conceptual framework, it suffers when you break it down to the working
level. If, for example, one equates “charter” with “enabling
legislation”—-and it is beyond question that the charter of a
government corporation is its enabling legislation—the attributes
apply equally to any government agency. Similarly, we previously noted
a statement from a GAO report that government corporations “are
generally federally chartered entities created to serve a public
function of a predominantly business nature.” GAO, Government
Corporations: Profiles of Existing Government Corporations, GAO/GGD-96-
14 (Washington, D.C.: Dec. 13, 1995), at 1. This again shows the
hazard of generalization, saved by the fortunate inclusion of the word
“generally,” since some government corporations may perform primarily
governmental functions (e.g., the Commodity Credit Corporation, which
stabilizes and protects farm income and prices).
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[51a] For example, in 2009 GAO identified 23 government corporations,
defined as “an entity established by the U.S. government in a
corporate form by a federal charter for a public purpose.” GAO,
Federally Created Entities: An Overview of Key Attributes, GAO-10-97
(Washington, D.C.: Oct. 29, 2009), at 13.
7. Application of Other Laws:
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As discussed in the previous sections, a government corporation’s180
autonomy, while conferring considerable spending discretion, does not
remove it from the coverage of various laws of the United States. We
set forth here several other laws governing the operations of federal
agencies. As one would expect, wholly owned corporations are subject
to more of the laws than mixed-ownership corporations, which are in
turn subject to more than the so-called noninstrumentality
corporations. Two summary charts, each including some laws not covered
here, may be found in GAO, Federally Created Entities: An Overview of
Key Attributes, GAO-10-97 (Washington, D.C.: Oct. 29, 2009), at 34,
and Government Corporations: Profiles of Existing Government
Corporations, GAO/GGD-96-14 (Washington, D.C.: Dec. 13, 1995), App.
III. See also Library of Congress, Congressional Research Service,
Federal Government Corporations: An Overview, No. RL30365 (Mar. 15,
2005), at App. 1; Thomas H. Stanton and Ronald C. Moe, “Government
Corporations and Government-Sponsored Enterprises,” in Lester M.
Salaman, The Tools of Government: A Guide to the New Governance, 80,
92 table 3-1 (2002).
C. Nonappropriated Fund Instrumentalities:
1. Introduction:
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Further complicating the discussion of NAFIs is the use of the term
NAFI by some federal courts. The Federal Circuit and the Court of
Federal Claims have used the term in cases discussing their
jurisdiction. See, e.g., AINS, Inc. v. United States, 365 F.3d 1333,
1343 (Fed. Cir. 2004) (holding that the court had no jurisdiction to
hear case against U.S. Mint because it was a NAFI); Slattery
v. United States, 583 F.3d 800, 807–12 (Fed. Cir. 2009) (holding that
the court had jurisdiction because the Federal Deposit Insurance
Corporation is not a NAFI). See also O’Quin v. United States, 72 Fed.
Cl. 20, 23–24 (2006); McCafferty v. United States, 61 Fed. Cl. 615,
616 (2004). The Federal Circuit’s definition of a NAFI for purposes of
its jurisdiction has resulted in classifying some entities that
operate with permanent, indefinite appropriations as NAFIs. See AINS,
365 F.3d 1333; Core Concepts of Florida, Inc. v. United States,
327 F.3d 1331 (Fed. Cir. 2003). See also Furash & Co. v. United
States, 252 F.3d 1336 (Fed. Cir. 2001) (holding that the court had no
jurisdiction to hear claims against the Federal Housing Finance Board
because it was a NAFI).[Footnote 244]
[End of document]